Saving Tipshttps://www.businessinsider.com/category/saving-tips
en-usSat, 25 May 2019 10:13:55 -0400Sat, 25 May 2019 10:13:55 -0400The latest news on Saving Tips from Business Insiderhttps://static3.businessinsider.com/assets/images/bilogo-250x36-wide-rev.pngBusiness Insiderhttps://www.businessinsider.com
https://www.businessinsider.com/how-much-should-you-save-2017-9I'm a financial planner — here's what I tell people who ask if they're saving enough moneyhttps://www.businessinsider.com/how-much-should-you-save-2017-9
Tue, 23 Apr 2019 14:13:00 -0400Lauren Lyons Cole
<p><img src="https://static5.businessinsider.com/image/58498835ba6eb605688b71ea-911/undefined" border="0" alt="sunglasses smile race wealthy" data-mce-source="Michael Dodge / Stringer / Getty Images"></p><p></p>
<ul class="summary-list">
<li><strong>The average American saves 7.5% of their income after taxes and expenses.</strong></li>
<li><strong>Financial experts often recommend saving 10% or more, which can sound overwhelming.</strong></li>
<li><strong>As a financial planner, I've seen how hard it can be for my clients to save, but creating momentum can help.</strong></li>
<li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories.</a></li>
</ul>
<p>Savings advice can sometimes seem like satire.</p>
<p>Start early. Save 15% of your income. Make sure it's your pretax income. Do it for 40 years. Cross your fingers. Click your heels.</p>
<p>But in the real world, that's not how it works for most people.</p>
<p>As a <a href="http://www.businessinsider.com/author/lauren-lyons-cole" target="_blank" rel="noopener noreferrer">financial planner in New York City</a>, I see firsthand how dismayed many people are by the standard savings advice. To those of us who work with money all day, 15% is just a number. But to someone who is trying to make ends meet, it can feel like a failing grade.</p>
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<p><a href="https://twitter.com/BenjaminPDixon/" target="_blank" rel="noopener noreferrer"><br>Benjamin Dixon</a> captured this sentiment perfectly when he tweeted "<a href="https://twitter.com/BenjaminPDixon/status/892907913748111360" target="_blank" rel="noopener noreferrer">I almost choked on my avocado toast</a>" in response to a 2017 <a href="https://www.cnbc.com/2017/07/26/how-much-money-you-should-have-saved-by-30.html">CNBC article</a> that recommended having double your annual salary saved by age 35. The tweet has thousands of retweets and likes.</p>
<p>Clearly, Dixon's comment resonated.</p>
<p>Although savings advice is well-intentioned — and not wrong — there's a disconnect between the advisers and the advised. The personal savings rate in the US is <a href="https://fred.stlouisfed.org/series/PSAVERT" target="_blank" rel="noopener noreferrer">7.5% of disposable income</a>, according to January data from the US Bureau of Economic Analysis.</p>
<p>Many factors account for the savings gap: <a href="https://www.businessinsider.com/how-to-pay-off-debt-quickly-2017-6">student loans</a>, healthcare, expensive housing.</p>
<p>So saving 15% today probably isn't possible for most people. But that doesn't mean you should throw in the towel. Perhaps you could save 1% more than you are now, or 3% more. Incrementally increasing your savings will help your account balances grow, but it does something else that's even more valuable: It creates momentum. Once you start moving, it's easier to keep going.</p>
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<p><br>Speaking of momentum, it could be time to look for <a href="http://www.businessinsider.com/earn-more-money-switching-jobs-2017-7" target="_blank" rel="noopener noreferrer">a new job with a higher salary</a>. Getting a raise allows you to bulk up your savings percentage without cutting back on your current expenses.</p>
<p>Temporary savings hacks can do wonders, too. Saving aggressively by using the <a href="https://www.businessinsider.com/how-to-save-50000-in-your-20s-2017-7" target="_blank" rel="noopener noreferrer">"starve and stack" method</a>, for example, could make a huge difference in your <a href="https://www.businessinsider.com/cutting-back-key-retiring-much-earlier-2017-7" target="_blank" rel="noopener noreferrer">future retirement account balances</a>.</p>
<p>If guidelines help, there are plenty to follow, like those <a href="https://www.businessinsider.com/how-much-money-to-save-in-every-decade-of-your-life-2017-3" target="_blank" rel="noopener noreferrer">laid out by David Bach</a>, a financial adviser, in his book "<a href="https://www.amazon.com/dp/B01G0GD0PE/ref=dp-kindle-redirect?_encoding=UTF8&amp;btkr=1" target="_blank" rel="noopener noreferrer">The Automatic Millionaire</a>," or charts showing <a href="https://www.businessinsider.com/how-to-retire-by-income-2017-6" target="_blank" rel="noopener noreferrer">how much you need to have saved to retire</a>.</p>
<p>Ultimately, it's important to be honest with yourself. Sometimes, saving isn't going to possible. But the key word is sometimes. At other times, you will have the ability to save, and you should make it a priority while you can — even if that means moving to a cheaper apartment or trading a gas-guzzling car for one that gets better fuel economy.</p>
<p>As with any goal, you can't be too hard on yourself. <a href="https://www.businessinsider.com/how-to-build-better-habits-2017-9" target="_blank" rel="noopener noreferrer">There's never going to be a perfect week</a>, or month, or year. All you can do is recognize the difference between when you truly can't save and when you probably could do more than you are now.</p>
<p><em><strong>Ready to get serious about saving? Consider these offers from our partners:</strong></em></p>
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</div><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/how-to-save-more-money-2017-8" >Forget coffee and avocado toast — most people blow nearly 40% of their money in the same place</a></strong></p>
<p><strong>DON'T MISS:&nbsp;<a href="http://www.businessinsider.com/best-money-advice-financial-planner-2017-6" >I'm a financial planner — here's the single best piece of advice I can give you about money</a></strong></p>
<p><a href="https://www.businessinsider.com/how-much-should-you-save-2017-9#comments">Join the conversation about this story &#187;</a></p> https://www.businessinsider.com/double-savings-easy-automatic-ally-bank-2019-1I doubled my savings in 2018 and it took only 5 minutes of efforthttps://www.businessinsider.com/double-savings-easy-automatic-ally-bank-2019-1
Mon, 21 Jan 2019 14:35:00 -0500Tanza Loudenback
<p><img src="https://static6.businessinsider.com/image/5c2d1e5bbd77303174629bc4-1975/image%20from%20ios.jpg" border="0" alt="tanza savings" data-mce-source="Tanza Loudenback/Business Insider"></p><p></p>
<ul class="summary-list">
<li>My savings-account balance doubled in 2018, no thanks to a windfall or some form of personal-finance wizardry.</li>
<li>I set up automatic savings and kept my savings account at a different bank from my checking account.</li>
<li>This strategy is championed by author <a href="https://www.businessinsider.com/category/james-clear">James Clear</a> in his book "<a href="https://www.amazon.com/gp/product/0735211299/ref=as_li_tl?ie=UTF8&amp;tag=biip_010719_doubled-savings-five-minutes-effort-20&amp;camp=1789&amp;creative=9325&amp;linkCode=as2&amp;creativeASIN=0735211299&amp;linkId=62d716c93b20e09a59237a009cb1ecf3" target="_blank" rel="noopener">Atomic Habits</a>" — he says adding "friction" to bad habits can make them impractical, while automating good habits can make them stick.</li>
</ul>
<p>I spend a lot of time thinking about money. Part of my job is writing about it, and, perhaps like you, I'm constantly scheming to <a href="https://www.businessinsider.com/category/saving">save more</a>: How else am I going to afford an indulgent vacation or dream house one day?</p>
<p>So I was delighted when I checked one of my savings accounts this week and discovered my balance had doubled since January 2018, <em>and I didn't even know it. </em></p>
<p>I soon realized my good fortune was thanks to two low-effort actions: I <a href="https://www.businessinsider.com/why-automated-savings-is-the-key-to-building-wealth-2016-12">automate my savings</a>, and I keep the account at a different bank.</p>
<p>Almost two years ago, I opened a high-yield savings account at <a href="https://www.businessinsider.com/why-best-bank-for-millennials-is-online-only-ally-bank-2018-7">Ally Bank</a>, which was named the best bank for millennials and the best internet bank in 2018 by personal-finance magazine Kiplinger.</p>
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<p> </p>
<p>I went to my payroll portal and set up auto-savings to direct a fixed amount of every paycheck into my Ally account. It took less than five minutes.</p>
<p>Every two weeks, my savings account balance increases by the same amount, plus interest. Ally currently offers a 2% annual percentage yield; <a href="https://www.awin1.com/cread.php?awinmid=12195&amp;awinaffid=257137&amp;clickref=biip_010719_doubled-savings-five-minutes-effort&amp;p=https%3A%2F%2Fwww.fool.com%2Fthe-ascent%2Fbanks%2Fbest-savings-accounts%2F%3Fsource%3Dawin%26awc%3D12195_1546891232_4332e71927774bd40b7c5e1f7c9d1bb1%26utm_source%3Daw%26utm_medium%3Daffiliate%26utm_campaign%3D78888" target="_blank" rel="noopener">typical savings accounts</a> at traditional banks average 0.07%. That stellar interest rate netted me an extra $68 last year.</p>
<p>With automated savings, the money comes out of my paycheck before I even see it, so I don't know what I'm missing. I just assume that money is off-limits, and I can spend only what's in my checking account, which brings me to the key part of this strategy and the reason I didn't know my savings doubled until now: My savings account is at Ally, but my checking account is at a different bank.</p>
<p>As it turns out, I unknowingly implemented <a href="https://www.businessinsider.com/achieve-health-happiness-bad-habits-harder-2018-12">a strategy championed by James Clear</a>, a productivity expert and the author of "<a href="https://www.amazon.com/gp/product/0735211299/ref=as_li_tl?ie=UTF8&amp;tag=biip_010719_doubled-savings-five-minutes-effort-20&amp;camp=1789&amp;creative=9325&amp;linkCode=as2&amp;creativeASIN=0735211299&amp;linkId=62d716c93b20e09a59237a009cb1ecf3" target="_blank" rel="noopener">Atomic Habits</a>." Clear says the best way to quit bad habits (spending money, in this case) is to add "friction," thereby making it harder to commit the bad habit.</p>
<p><em><strong>Read more:</strong> <a href="https://www.businessinsider.com/achieve-health-happiness-bad-habits-harder-2018-12">There's an easy strategy to start breaking your worst habits for 2019, and its opposite can help you build the good habits you want</a></em></p>
<p>"The best way to break a bad habit is to make it impractical to do," Clear wrote. "Increase the friction until you don't even have the option to act."</p>
<p>By setting up a savings account at a different bank entirely, I made it harder to just transfer money over into my checking account whenever I'm running low. Clear's examples of adding "friction" include taking the batteries out of your remote to deter TV watching and putting your phone in a different room so any time you feel inclined to scroll Instagram or text people aimlessly, you have to get up and find your phone first.</p>
<p>And the best way to develop good habits, like saving money? Make it easy. I can't think of any easier way to save money than doing it automatically.</p>
<p>As Clear says, "When working in your favor, automation can make your good habits inevitable and your bad habits impossible."</p>
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<p> </p><p><strong>SEE ALSO:&nbsp;<a href="https://www.businessinsider.com/save-30-dollars-a-day-millionaire-strategy-advice-2018-11" >I grew my net worth by over $100,000 in 2 years — and I started by saving just $5 a day</a></strong></p>
<p><strong>DON'T MISS:&nbsp;<a href="https://www.businessinsider.com/best-money-advice-from-self-made-millionaires-2018-12" >7 of the best pieces of advice self-made millionaires shared about money in 2018</a></strong></p>
<p><a href="https://www.businessinsider.com/double-savings-easy-automatic-ally-bank-2019-1#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/warren-buffett-net-worth-berkshire-hathaway-billionaire-coke-mcdonalds-2019-4">Warren Buffett, the third-richest person in the world, is also one of the most frugal billionaires. Here's how he makes and spends his fortune.</a></p> https://www.businessinsider.com/save-30-dollars-a-day-millionaire-strategy-advice-2018-11I grew my net worth by over $100,000 in 2 years — and I started by saving just $5 a dayhttps://www.businessinsider.com/save-30-dollars-a-day-millionaire-strategy-advice-2018-11
Mon, 26 Nov 2018 10:45:00 -0500The Money Wizard, Contributor
<p><img src="https://static4.businessinsider.com/image/5bf45cde01b12d0d4573f69a-1778/gettyimages-982078780.jpg" border="0" alt="wealth" data-mce-source="Bryn Lennon/Getty Images" /></p><p></p>
<ul class="summary-list">
<li><strong>Sean, who goes by<span>&nbsp;</span><a href="https://mymoneywizard.com/" target="_blank" rel="noopener">"The Money Wizard,"</a><span>&nbsp;</span>is a 28-year-old blogger and financial analyst.</strong></li>
<li><strong>He grew his net worth by<span>&nbsp;</span><a href="https://www.businessinsider.com/money-advice-to-grow-net-worth-early-retirement-2018-5" target="_blank" rel="noopener">more than $100,000 in two years</a><span>&nbsp;</span>and is on track for an<span>&nbsp;</span><a href="http://www.businessinsider.com/category/early-retirement" target="_blank" rel="noopener">early retirement</a>.</strong></li>
<li><strong>Sean found that one of the best ways to start <a href="https://www.businessinsider.com/category/building-wealth">building wealth</a> is to save small amounts of money every day &mdash; he started by saving $5 a day and is now saving about $100 a day.</strong></li>
<li>His calculations reveal that if you save and invest $30 a day, earning a 7% rate of return, you can be a millionaire in 30 years.&nbsp;</li>
</ul>
<p><span style="font-weight: 400;">Built over&nbsp;</span><span style="font-weight: 400;">four thousand&nbsp;years&nbsp;</span><span style="font-weight: 400;">ago, The Great Pyramid of Giza stood as the tallest structure in the world until 1311. (That's a run that makes the Empire State Building's 40-year reign seem like a blip&hellip;)</span></p>
<p><span style="font-weight: 400;">The construction used over&nbsp;</span><span style="font-weight: 400;">2.3 million</span><span style="font-weight: 400;">&nbsp;slabs of giant granite blocks, each one cut with amazing precision.</span></p>
<p><span style="font-weight: 400;">Just how ancient civilizations managed the construction is a mystery that's perplexed scientists for centuries. Some say the pyramid is actually an eroded mountain. Others claim it's part of the Lost City of Atlantis or evidence of extraterrestrial help from Ancient Aliens.</span></p>
<p><span style="font-weight: 400;">But here's the most likely scenario, and the one most historians agree on:&nbsp;</span><span style="font-weight: 400;">30,000 skilled laborers worked tirelessly, dragging the granite up ramp after ramp, slowly hoisting the stones hundreds of feet in the air. Day in and day out, for over 20 years.</span></p>
<p><span style="font-weight: 400;">That our minds have trouble imaging this mostly likely scenario isn't all that surprising,&nbsp;because we do the exact same thing with our money goals every day.</span></p>
<h2><strong>The small stuff adds up</strong></h2>
<p><span style="font-weight: 400;">One of the&nbsp;</span><a href="https://mymoneywizard.com/best-finance-books-beginners/"><span style="font-weight: 400;">first finance books</span></a><span style="font-weight: 400;">&nbsp;I ever read was <a href="https://www.businessinsider.com/category/david-bach">David Bach</a>'s Automatic Millionaire. In it, he explains the idea of The Latte Factor.</span></p>
<p><span style="font-weight: 400;">The Latte Factor is the concept that <a href="https://www.businessinsider.com/why-automated-savings-is-the-key-to-building-wealth-2016-12">tiny amounts of money could add up</a> to huge amounts of savings over time. True to the name, the classic example is a $5 cup of coffee each morning.</span></p>
<p><span style="font-weight: 400;"><em><strong>Read more:&nbsp;</strong><a href="https://www.businessinsider.com/how-to-grow-net-worth-advice-savings-tips-2018-9">I've saved nearly $270,000 at age 28, and I'm convinced the key to growing your net worth is spending less on 3 things</a></em></span></p>
<p><span style="font-weight: 400;">As David explains, if that same $5 was instead invested and earned the stock market's historical return of 7% per year, our luxury coffee drinker would have an extra $1,953 after just one year.</span></p>
<p><span style="font-weight: 400;">And after 40 years?</span></p>
<p><span style="font-weight: 400;">Wait for it&hellip;</span></p>
<p><strong>$389,837!</strong></p>
<p><span style="font-weight: 400;">Just from a few coffees! </span></p>
<p><span style="font-weight: 400;">I immediately found the idea fascinating. And as a money blogger chasing total financial freedom, of course I wanted to figure out how much I'd have to save per day to reach my ultimate goal: a $1 million dollar portfolio and an early exit from the rat race. </span></p>
<h2><strong>The 30 for 30 Rule: How saving $30 a day will make you a millionaire</strong></h2>
<p><span style="font-weight: 400;">I plugged the numbers into my financial calculator over and over, and yet the result was always the same.</span></p>
<p>All it takes to become a millionaire is to save just $30 a day (that's assuming the stock market's historical 7% rate of return). Over and over again.&nbsp;</p>
<p><span style="font-weight: 400;">I don't know about you, but I immediately found this incredibly relieving.&nbsp;</span><span style="font-weight: 400;">I'd be intimidated if the only path to wealth was a lucky break, a brilliant business idea, or a Powerball victory.</span></p>
<p><span style="font-weight: 400;">But $30 a day? Anyone can save $30 a day!</span></p>
<p><img src="https://static6.businessinsider.com/image/5bf5762ad1e84442114da9d7-660/30 for 30 rule jpg.jpg" border="0" alt="30 for 30 rule money wizard" data-mce-source="The Money Wizard" /></p>
<p><span style="font-weight: 400;">$30 a day is as simple as passing on a dinner out, driving a cheaper car, or even working a couple extra hours at a low-paying job.</span></p>
<p><span style="font-weight: 400;">And if cutting back isn't your style, I just finished a step-by-step strategy showing how anyone can&nbsp;</span><a href="https://mymoneywizard.com/side-hustle-strategy-earn-extra-10000-dollars/"><span style="font-weight: 400;">side hustle an extra $11,207 next year</span></a><span style="font-weight: 400;">.</span></p>
<p><span style="font-weight: 400;">What do you know&hellip; that's a perfect $30.70 a day!</span></p>
<h2><strong>"Sure, Money Wizard, but 30 years is a loooong time&hellip;"</strong></h2>
<p><span style="font-weight: 400;">Here's the great part about The Latte Factor and The 30 for 30 Rule: It's a starting point.</span></p>
<p><span style="font-weight: 400;">Because I promise you, once you open your eyes to the incredible compounding effect of your money, you'll find yourself looking to up your savings wherever you can.</span></p>
<p><span style="font-weight: 400;">I started out inspired by the idea of saving $5 a day. Before I knew it, I'd upped that saving to $10, then $20 a day.</span></p>
<p><span style="font-weight: 400;">Eventually, I hit the magic $30 a day. And then I asked myself, "Why not fast track this path to a million?"</span></p>
<p><span style="font-weight: 400;"><em><strong>Read more:</strong>&nbsp;<a href="https://www.businessinsider.com/how-to-invest-early-retire-a-millionaire-2018-7">I've saved enough at age 28 that I'll be a multimillionaire by retirement, and I used Warren Buffett's favorite investing strategy to do it</a></em></span></p>
<p><span style="font-weight: 400;">So I started cutting costs where I could, and working relentlessly to increase my income. Before I knew it, I was saving $40, $50, and $60 a day.</span></p>
<p><span style="font-weight: 400;">And last year? I saved a whopping $35,000. That's nearly&nbsp;</span>$100 a day<span style="font-weight: 400;">.</span></p>
<p><span style="font-weight: 400;">Invested in a mix of index funds, that was enough to grow my net worth from $158,000 to $231,000&nbsp;</span><span style="font-weight: 400;">in one year.&nbsp;</span><span style="font-weight: 400;">(You can see my net worth tracked every month&nbsp;</span><a href="https://mymoneywizard.com/net-worth/"><span style="font-weight: 400;">here</span></a>.<span style="font-weight: 400;">)</span></p>
<h2><strong>Money doesn't have to be as complicated as the pyramids &mdash; because the secret to success is easier than you think</strong></h2>
<p><span style="font-weight: 400;">The pyramids weren't built by Ancient Aliens, and millionaires don't have to get lucky.</span></p>
<p><span style="font-weight: 400;">A little bit of effort, over and over again, is all it takes to build serious wealth.</span></p>
<p style="padding-left: 30px;"><span style="font-weight: 400;">"You don't set out to build a wall. You don't say 'I'm going to build the biggest, baddest, greatest wall that's ever been built.' You don't start there. You say, 'I'm going to lay this brick as perfectly as a brick can be laid.' You do that every single day. And soon you have a wall." &ndash; Will Smith</span></p><p><strong>SEE ALSO:&nbsp;<a href="https://www.businessinsider.com/money-advice-to-grow-net-worth-early-retirement-2018-5" >I grew my net worth by over $100,000 in 2 years. Here are 4 steps you can take today to do the same.</a></strong></p>
<p><strong>DON'T MISS:&nbsp;<a href="https://www.businessinsider.com/save-more-money-reduce-food-spending-2018-11" >A 30-year-old who's saving half her income says kicking 2 daily habits helped her bank an extra $1,000 a month</a></strong></p>
<p><a href="https://www.businessinsider.com/save-30-dollars-a-day-millionaire-strategy-advice-2018-11#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/warren-buffett-net-worth-berkshire-hathaway-billionaire-coke-mcdonalds-2019-4">Warren Buffett, the third-richest person in the world, is also one of the most frugal billionaires. Here's how he makes and spends his fortune.</a></p> https://www.businessinsider.com/save-more-money-reduce-food-spending-2018-11A 30-year-old who's saving half her income says kicking 2 daily habits helped her bank an extra $1,000 a monthhttps://www.businessinsider.com/save-more-money-reduce-food-spending-2018-11
Thu, 08 Nov 2018 15:30:00 -0500Tanza Loudenback
<p><img src="https://static4.businessinsider.com/image/5be488201011427a6d5d07dd-1765/img8207.jpg" border="0" alt="Angela Rozmyn" data-mce-source="Courtesy of Angela Rozmyn"></p><p></p>
<ul class="summary-list">
<li><strong>Angela Rozmyn lives in <a href="https://www.businessinsider.com/category/seattle" target="_blank" rel="noopener">Seattle</a> with her husband and son and works as a LEED accredited professional.</strong></li>
<li><strong>She and her husband are saving close to 50% of their <a href="https://www.businessinsider.com/category/income" target="_blank" rel="noopener">income</a> and plan to <a href="https://www.businessinsider.com/category/retire" target="_blank" rel="noopener">retire</a> in their early 40s. </strong></li>
<li><strong>Over the past two years, Rozmyn reduced her family's food spending to a monthly average of $800 from $2,000 by cutting out expensive weekday lunches and minimizing trips to the grocery store.</strong></li>
</ul>
<p>Angela Rozmyn used to spend upward of $2,000 a month on food for her family of three.</p>
<p>It seemed justified, she told Business Insider. They live in Seattle, where local and sustainable produce, high-quality meat, and craft beer often command a higher price. Add in food delivery and last-minute trips to the grocery store, and it's easy to rack up a big bill, she said.</p>
<p>Rozmyn, 30, and her husband <a href="https://www.thecut.com/2018/11/im-30-and-planning-on-retiring-in-10-years.html">have plans to retire by age 45</a>, which she chronicles on her blog, <a href="https://treadlightlyretireearly.com">Tread Lightly, Retire Early</a>. They're homeowners who both work in construction — she's a LEED accredited professional — and earn a combined income in the low six figures.</p>
<p>But spending more than double the US Department of Agriculture's <a href="https://www.cnpp.usda.gov/sites/default/files/CostofFoodSep2018.pdf">recommended monthly food budget</a> for a family of three — $770 for a moderate-cost plan — was no help on their path to <a href="https://www.businessinsider.com/category/early-retirement">early retirement</a>. Rozmyn said that by the time she returned to work from maternity leave in late 2016, she realized her habit of buying lunch and frequenting coffee shops had "spiraled out of control."</p>
<p>Rozmyn instituted a monthly $150 lunch budget for herself. She ended up spending just $87 during the first month and eventually went six months without spending a dime on lunch during the week.</p>
<p>"Now I average maybe twice a month, and only when there's a purpose — mini-date with my husband, lunch with a friend — not just because I didn't pack food or didn't feel like eating what I brought," she said.</p>
<p>But there was more work to do for Rozmyn and her husband to hit their goal savings rate of 50%.</p>
<p><em><strong>How close are you to being able to retire? Find out with this calculator from our partners:</strong></em></p>
<div>
<iframe src="https://smartasset.com/captivate/frame/na8gsflv" width="100%" height="650px" scrolling="auto" style="border: none;"></iframe>
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<p> </p>
<p>Buying a home within walking distance of a grocery store was supposed to be a strategy for saving money, <a href="https://treadlightlyretireearly.com/2018/02/19/we-cut-our-grocery-budget-by-63-and-eat-better-than-ever/">Rozmyn wrote in a blog post</a>. Instead, they ended up at the store most nights picking up last-minute ingredients or prepared meals.</p>
<p><em><strong>Read more:</strong> <a href="https://www.businessinsider.com/early-retirement-money-spending-habits-experiences-2018-10">Many people who retire early prefer to spend their money the same way</a></em></p>
<p>During a "no-spend November" challenge, Rozmyn went to the store once a week instead of every day and started using leftover ingredients in the pantry or freezer to get creative with meals. She also started baking from scratch rather than picking up packaged sweets from the store, as well as tending to a fresh vegetable garden and marinating meats at home.</p>
<p>Rozmyn said that from July 2017 to this January, her family's <a href="https://treadlightlyretireearly.com/2018/02/19/we-cut-our-grocery-budget-by-63-and-eat-better-than-ever/">overall food spending</a> — groceries, restaurants, and fast food — fell to $888 from $2,027, and they were eating better than ever, thanks to more home cooking.</p>
<p>"Now almost all of our eating-out expense happens on vacations and our weekend getaways, because one of our favorite ways to travel is to eat through new cities, but even that is purposeful now instead of a free-for-all," she said.</p>
<p><em><strong>Read more:</strong> <a href="https://www.businessinsider.com/is-spending-money-worth-it-trick-2018-10">A Hollywood producer who spent over a year following around early retirees has his own simple question to decide what's worth his money — and what isn't</a></em></p>
<p>Rozmyn said her and her husband's savings rate is up to 48% now. Spending does increase during some months, she said, but things like an increase in property taxes or the cost of preschool are out of their control. Ultimately, it's about staying the course and making progress.</p>
<p>As Rozmyn <a href="https://treadlightlyretireearly.com/2018/10/08/monthly-financial-update-september-2018/">wrote on her blog</a>: "Anytime I'm frustrated with our spending this year, I have to remind myself to re-read my words from just one year ago to keep my annoyance in check; our worst month this year is still better than the average for all of the previous years."</p><p><strong>SEE ALSO:&nbsp;<a href="https://www.businessinsider.com/how-to-grow-net-worth-advice-savings-tips-2018-9" >I've saved nearly $270,000 at age 28, and I'm convinced the key to growing your net worth is spending less on 3 things</a></strong></p>
<p><strong>DON'T MISS:&nbsp;<a href="https://www.businessinsider.com/why-millennials-want-to-retire-early-2018-10" >A Hollywood producer spent over a year figuring out why millennials all want to retire early, and the reason should worry the rest of us</a></strong></p>
<p><a href="https://www.businessinsider.com/save-more-money-reduce-food-spending-2018-11#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/stewart-butterfield-advice-for-millenials-2015-7">Stewart Butterfield, co-founder of Slack and Flickr, says 2 beliefs have brought him the greatest success in life</a></p> https://www.businessinsider.com/how-to-grow-net-worth-advice-savings-tips-2018-9I've saved nearly $270,000 at age 28, and I'm convinced the key to growing your net worth is spending less on 3 thingshttps://www.businessinsider.com/how-to-grow-net-worth-advice-savings-tips-2018-9
Wed, 26 Sep 2018 08:58:00 -0400The Money Wizard
<p><img src="https://static1.businessinsider.com/image/5baaa8ece55aa8c7638b4569-1740/shutterstock1124927414.jpg" border="0" alt="anonymous guy thinking" data-mce-source="dekazigzag/Shutterstock" /></p><p></p>
<ul class="summary-list">
<li><strong>Sean, who goes by<span>&nbsp;</span><a href="https://mymoneywizard.com/" target="_blank" rel="noopener">"The Money Wizard,"</a><span>&nbsp;</span>is a 28-year-old blogger and financial analyst whose current net worth is nearly $270,000.</strong></li>
<li><strong>Sean grew his net worth by<span>&nbsp;</span><a href="https://www.businessinsider.com/money-advice-to-grow-net-worth-early-retirement-2018-5" target="_blank" rel="noopener">more than $100,000 in two years</a>&nbsp;and is on track for an <a href="http://www.businessinsider.com/category/early-retirement" target="_blank" rel="noopener">early retirement</a>.</strong></li>
<li><strong>He says the key to growing your net worth is reducing three big expenses: Housing, transportation, and food.</strong></li>
<li><strong>Once Sean cut back on those things, he was able to increase his retirement contributions and <a href="https://www.businessinsider.com/how-to-invest-early-retire-a-millionaire-2018-7" target="_blank" rel="noopener">investments</a>. </strong></li>
</ul>
<p><span style="font-weight: 400;">Last year, I vacationed to Alaska, Florida, Colorado, New Orleans, and San Francisco. Plus ski trips to Aspen, Colorado, and Whistler, Canada.</span></p>
<p><span style="font-weight: 400;">More than I'd like to admit, I also spent aimlessly on concerts and events, spoiled my pets with way too many toys, and cannot remember a single time I turned down a night at the breweries with friends.</span></p>
<p><span style="font-weight: 400;">Now's the part of the intro where I'm supposed transition to the bad news to let you know how much debt I've racked up, and how I'm living way beyond my means.</span></p>
<p><span style="font-weight: 400;">But I have a curveball for you. Despite&nbsp;all those expenses, I only spent about $25,000 for the whole year.</span></p>
<p><span style="font-weight: 400;">This level of frugality allowed me to </span><a href="https://mymoneywizard.com/net-worth/"><span style="font-weight: 400;">grow my net worth by $73,000 last year</span></a><span style="font-weight: 400;">. (Of which, about $35,000 was investment returns and the remaining $38,000 was from saving over 50% of my income, plus employer 401(k) contributions.)</span></p>
<p><span style="font-weight: 400;">How?</span></p>
<p><span style="font-weight: 400;">I focused on just three expenses.</span></p><p><strong>SEE ALSO:&nbsp;<a href="https://www.businessinsider.com/net-worth-tracking-early-retirement-money-advice-2018-6" >I'm 28 and I've saved over $240,000 — here's what I've learned about money from tracking my net worth for the past 2 years</a></strong></p>
<p><strong>DON'T MISS:&nbsp;<a href="https://www.businessinsider.com/how-to-invest-early-retire-a-millionaire-2018-7" >I've saved enough at age 28 that I'll be a multimillionaire by retirement, and I used Warren Buffett's favorite investing strategy to do it</a></strong></p>
<h3>The three biggest expenses: Housing, transportation, and food.</h3>
<img src="https://static5.businessinsider.com/image/5baa8b6d39ce1a7a608b456b-400-300/the-three-biggest-expenses-housing-transportation-and-food.jpg" alt="" />
<p><p><span style="font-weight: 400;">It turns out, even though we all have different salaries, different savings rates, and ultimately, different net worths, most people's spending patterns are remarkably similar.</span></p>
<p><span style="font-weight: 400;">At least that's what the US Bureau of Labor Statistics found out in their </span><a href="https://www.bls.gov/news.release/cesan.htm"><span style="font-weight: 400;">comprehensive study on consumer spending</span></a><span style="font-weight: 400;">. Those economics geeks spent years analyzing the numbers, and they found that nearly all of our spending is funneled towards just three categories:</span></p>
<ol>
<li style="font-weight: 400;"><span style="font-weight: 400;">Housing</span></li>
<li style="font-weight: 400;"><span style="font-weight: 400;">Transportation</span></li>
<li style="font-weight: 400;"><span style="font-weight: 400;">Food</span></li>
</ol>
<p><span style="font-weight: 400;">(We know it took those geeks years, since, like any good government agency, they're a couple years behind &mdash; their most recent study is still from 2016.)</span></p>
<p><span style="font-weight: 400;">How big are the big three? Well, that same study found those three categories account for&nbsp;</span><span style="font-weight: 400;">nearly 70%</span><span style="font-weight: 400;">of the average consumer's annual spending. (</span><span style="font-weight: 400;">For some reason, the government includes social security contributions as spending. Since this is something we literally have zero control over, I've adjusted this out of the data.)</span></p>
<p><span style="font-weight: 400;">And there lies my key to living a lavish lifestyle while saving a fortune.</span></p>
<p><span style="font-weight: 400;">I work ruthlessly to cut the big three. Then, I spend guilt free on everything else, because I know the data shows that most often, all these other categories barely make a dent.</span></p></p>
<br/><br/><h3>1. Housing — 37% of the average budget</h3>
<img src="https://static1.businessinsider.com/image/5baa8c0933db9e91608b456b-400-300/1-housing--37-of-the-average-budget.jpg" alt="" />
<p><p><span style="font-weight: 400;">Most people, namely realtors and landlords, will try to convince you this category is entirely out of your control. Of course, this is mostly nonsense.</span></p>
<p><span style="font-weight: 400;">So, how can you tame this "uncontrollable" expense? Well, nobody knows your situation better than yourself, but here are a few steps that helped me:</span></p>
<p><span style="font-weight: 400;">1. I realized I probably need less house than I think, since </span><a href="https://mymoneywizard.com/millennials-home-prices-today/"><span style="font-weight: 400;">68% of the average home's square footage goes entirely unused</span></a><span style="font-weight: 400;">. As a result, I've lived in places noticeably smaller than my peers every year during my working career.</span></p>
<p><span style="font-weight: 400;">2. I realized there's no need to compete with every HGTV episode I've ever seen, and it's okay for my financial security to put the Pinterest-worthy remodel on hold for a moment. Most notably, this meant renting an apartment with plain old white appliances, instead of stainless steel. Amazingly, I couldn't spot any ways this negatively impacted my life.</span></p>
<p><span style="font-weight: 400;">3. I realized that in a world of rideshare apps, I could still live a similar lifestyle even if my zip code was in a less-trendy part of town. At a fraction of the cost!</span></p>
<p><span style="font-weight: 400;">4. When all else fails, I know the United States is a huge place, and nothing is gluing anybody in one spot. While it wasn't the only factor, Denver's out-of-control real estate market was something I considered when I packed up shop and moved to Minneapolis a few years ago.</span></p></p>
<br/><br/><h3>2. Transportation — 18% of the average budget</h3>
<img src="https://static6.businessinsider.com/image/5baa8d90e55aa81a608b4569-400-300/2-transportation--18-of-the-average-budget.jpg" alt="" />
<p><p><span style="font-weight: 400;">If housing is scapegoated as the most uncontrollable expense, even the most skeptical readers have to agree transportation might be our most easily managed cost.</span></p>
<p><span style="font-weight: 400;">According to our study, the average consumer spends nearly $750 a month on vehicle related expenses! By any measure, that's a financial car crash just waiting to happen.</span></p>
<p><span style="font-weight: 400;">When it comes to automobile spending, here's what I do to avoid falling asleep at the wheel:</span></p>
<p><span style="font-weight: 400;">1. I kept my 13-year-old beater as long as it would continue to run. While my friends were blowing cash every month on a car payment, I knew every month old faithful stuck around, she was basically writing me a multi-hundred dollar check!</span></p>
<p><span style="font-weight: 400;">2. When I finally had no choice but to upgrade my ride, I bought something cheap enough that I could completely avoid a car payment. This let me eliminate one of the biggest recurring expenses in the average budget.</span></p>
<p><span style="font-weight: 400;">3. I know the IRS estimates that between maintenance, depreciation, and miscellaneous vehicle expenses, each mile driven indirectly </span><a href="https://www.irs.gov/newsroom/standard-mileage-rates-for-2018-up-from-rates-for-2017"><span style="font-weight: 400;">costs us 54.5 cents</span></a><span style="font-weight: 400;">. So, I do everything I can to limit how much and how often I drive. Including&hellip;</span></p>
<p><span style="font-weight: 400;">4. Living close enough to work to limit the dreaded morning commute. At 54.5 cents a mile, a long commute is a silent budget killer, so I do everything in my power to avoid it.</span></p></p>
<br/><br/><h3>3. Food — 14% of the average budget</h3>
<img src="https://static4.businessinsider.com/image/5baa904e33db9e25618b4569-400-300/3-food--14-of-the-average-budget.jpg" alt="" />
<p> <p><span style="font-weight: 400;">I'll admit, this is definitely the category I struggle with the most. What can I say? I'm a total sucker for a meal out.</span></p>
<p><span style="font-weight: 400;">That said, I've picked up a few tips during my constant battles with my food budget over the past few years:</span></p>
<p><span style="font-weight: 400;">1. Restaurant spending is a big killer here. While you'd have to pry my 4.5-star-rated yelp-favorites from my cold dead hands, I try my best to cut down on the "thoughtless" meals out. You know the type; when you're eating out not because it's any sort of special occasion, but just because you forgot to plan a meal. Keeping this in check not only saves cash, but also keeps restaurant meals an exciting novelty.</span></p>
<p><span style="font-weight: 400;">2. Avoid the middle aisles of the grocery store. Everyone likes to claim eating healthy is expensive, but the chips, snacks, and junk food are usually the highest markup items at the grocery store. Fruits and veggies cost next to nothing, and even basic cuts of meat are reasonably priced when eaten in modest portions.</span></p>
<p><span style="font-weight: 400;">3. Find a discount grocery store. The gourmet places will eat your savings alive.</span></p> </p>
<br/><br/><h3>You only need to control a few expenses to claim your freedom.</h3>
<img src="https://static3.businessinsider.com/image/5a955ab3aae60522008b45ce-400-300/you-only-need-to-control-a-few-expenses-to-claim-your-freedom.jpg" alt="" />
<p><p><span style="font-weight: 400;">Here's the other thing you might have noticed from the consumer spending pie chart: The average savings rate is an awful 4%.</span></p>
<p><span style="font-weight: 400;">For anyone interested in using their money as a tool for freedom, this is an absolute disaster. At a 4% savings rate, it will take you 25 years just to save one year's worth of expenses.</span></p>
<p><span style="font-weight: 400;">But if you cut down on the three biggest expenses, you can completely flip that script.</span></p>
<p><span style="font-weight: 400;">By focusing relentlessly on those big three, I boosted my savings rate to over 60% of my take-home pay. As a result, </span><a href="https://mymoneywizard.com/net-worth/"><span style="font-weight: 400;">my net worth just hit $269,000</span></a><span style="font-weight: 400;"> as a 28-year-old. And if I keep it up, </span><a href="https://mymoneywizard.com/how-much-money-do-you-need-to-retire/"><span style="font-weight: 400;">I'm on pace to retire in my 30s</span></a><span style="font-weight: 400;">.</span></p>
<p><span style="font-weight: 400;">Control just 3 expenses, and you can too.</span></p></p>
<br/><br/> https://www.businessinsider.com/how-to-invest-early-retire-a-millionaire-2018-7I've saved enough at age 28 that I'll be a multimillionaire by retirement, and I used Warren Buffett's favorite investing strategy to do ithttps://www.businessinsider.com/how-to-invest-early-retire-a-millionaire-2018-7
Tue, 14 Aug 2018 12:50:00 -0400The Money Wizard, Contributor
<p><img src="https://static5.businessinsider.com/image/5b5f38f27daf6d28008b48cb-1333/gettyimages-980376268.jpg" border="0" alt="wealthy anonymous" data-mce-source="Alan Crowhurst/Getty Images for Ascot Racecourse" /></p><p></p>
<ul>
<li><strong>Sean, who goes by <a href="https://mymoneywizard.com/" target="_blank" rel="noopener">"The Money Wizard,"</a> is a 28-year-old blogger and financial analyst whose current net worth is $250,000.</strong></li>
<li><strong>If he stopped saving money today, his worth could grow to $1.6 million to $2.2 million by retirement age, thanks to compound interest.</strong></li>
<li><strong>He says his strategy isn't complicated. Here's how he did it.&nbsp;</strong></li>
</ul>
<hr />
<p>I recently turned 28, and I've already <a href="https://www.businessinsider.com/net-worth-tracking-early-retirement-money-advice-2018-6">saved over a quarter of a million dollars.</a></p>
<p>By itself, that factoid had earned me a surprising amount of publicity. But for all the immediate headline-grabbing power of the statement, there's a far more impressive implication lurking underneath its surface. (The $250,000 is invested almost entirely in boring, low-fee index funds, the favorite investing strategy of <a href="https://www.businessinsider.com/warren-buffett-low-cost-investing-app-fee-comparison-2018-3" target="_blank" rel="noopener">billionaire Warren Buffett,</a> but we'll get to those details later.)</p>
<p>By saving $250,000 so far in my 20s, even if I never invest another cent for the rest of my life, I should retire with $1.6 million to $2.2 million &mdash; adjusted for inflation!</p>
<h2>The power of starting early</h2>
<p>Someone once told me that old people allow us to see the future. The statement resonated with me, because it's true.</p>
<p>No, Granny won't be able to tell you the screen size of the next iPhone. But we can see our future selves in the people who came before us. Through our elders, we can see what happens when we work too hard, play too much, neglect our health, or manage our money in different ways.</p>
<p>And when I was young, I saw two options for how your financial life can play out:</p>
<ol>
<li>Most old people forgot to save for retirement. Whether they were misled by a failing Social Security system or just forgot they couldn't work forever, sooner or later they approached retirement age, and their stress levels skyrocketed as they desperately began saving too little too late, like cramming the night before a big test. They were doomed.</li>
<li>Around the same time, I learned that my grandfather, who was one of the most frugal people I knew, was actually a millionaire. Despite earning a low, blue-collar wage and raising five children, he used <a href="https://www.businessinsider.com/early-retirement-playbook-from-26-year-old-2016-9">basic stock market investing</a> to retire with $1.2 million in the bank.</li>
</ol>
<p>So the paths were clear:</p>
<ul>
<li><strong>Path 1:</strong> I could put off investing completely. I could let the fear of losing money take over. Ironically, this ensures I lose tons of money from missed investment opportunities.</li>
<li><strong>Path 2:</strong> I could plan ahead. I could dedicate myself to learning how money works, and by making small changes to the things I buy now, I could take advantage of compound interest for decades.</li>
</ul>
<p>I took the second path.</p>
<p>I started buying stocks as a teenager, and I kept investing any spare change I could find. And once I started <a href="https://mymoneywizard.com/how-to-adult/">adulting,</a> I carefully designed my life to reduce all the wasteful spending and maximizing my happiness.</p>
<p>I passed on the big house, the fancy car, the designer clothes, and the latest electronics. But I wasn't a miser. In fact, saving so much money allowed me to spend more on things that mattered to me, like experiences with friends and copious amounts of travel. #TypicalMillennial...</p>
<p>Best of all? My happiness benefited from a complete lack of money-related stress, thanks to the comfort only a rapidly growing bank account can provide.</p>
<p>Before I knew it, I was a 25-year-old with $100,000 in the bank. I started my blog, and I began <a href="https://mymoneywizard.com/net-worth/">tracking my net worth every month.</a></p>
<p>Which brings us to today. Despite never earning six figures (and actually spending most of my savings years at an entry-level, $50,000-ish salary) my net worth just hit $250,000.</p>
<p>Roughly half of that $250,000 I've stashed away in 401(k) and Roth IRA retirement accounts, and the other half is held in post-tax brokerage accounts. And for all of that $250,000, I've invested in the lowest-fee, most broadly diversified Vanguard index funds I could find.</p>
<p>And that's where things get interesting.</p>
<h2>What if I stopped saving today?</h2>
<p>A few weeks ago, I decided to run an experiment. I'm currently saving like a madman, but what if I stopped saving completely?</p>
<p>Finance 101 says compound interest is one of the most powerful forces in the universe. But just how powerful is it?</p>
<p>I fired up the financial calculator &mdash; which is oddly similar to a normal calculator, just with a couple of extra compound-interest buttons thrown in.</p>
<p>I assumed:</p>
<ul>
<li>I'd never save or invest another cent for the rest of my life.</li>
<li>My money would return 6-7% per year, which is the stock market's historical return <em>after</em> subtracting inflation.</li>
<li>I'd let my portfolio compound until age 60 (the "normal" age of retirement, at least according to 401(k)/IRA withdrawal rules).</li>
</ul>
<p>I typed in the numbers, hit enter, and about fell out of my chair.</p>
<p>At 6% per year, the money I've already saved in my 20s should compound into $1,582,525!</p>
<p>At 7%? That'd be $2,137,194!!!</p>
<p><img src="https://static5.businessinsider.com/image/5b5f3a1179126d35008b4806-1200/compounding.png" border="0" alt="compounding money wizard" data-mce-source="Andy Kiersz/Business Insider" /></p>
<p>And because we've already adjusted for approximately 3% inflation per year, those numbers would buy the exact same amount of stuff as $1.6 million to $2.2 million today. (Put another way, if we include inflation, my future portfolio should actually be worth $5.3 million at age 60.)</p>
<h2>So what now?</h2>
<p>For decades, most people slave away at jobs they hate, hoping to save enough money to eventually retire. Many never make it.</p>
<p>And yet, thanks to a few short years of "sacrifice" early, just five years into my full-time career, I'm basically set for life. I've already reached the goal that's driving so much stress in this world, and because of that, I've unlocked endless opportunities.</p>
<p>With my retirement savings "finished," I could realistically:</p>
<ul>
<li>Stop saving entirely and start spending every dollar I earn on a lavish life of luxury.</li>
<li>Keep saving for years and build the portfolio to filthy-rich levels.</li>
<li>Walk away from a stressful career in finance and chase a lower-paying dream job.</li>
<li>Take a sabbatical from work, travel the world, or chase the entrepreneurial dream.</li>
<li>Or I could keep saving like a maniac for a few more years and cut that retirement age from my 60s to my 30s.</li>
</ul>
<p>The point is: I have <em>options.</em>&nbsp;And so can you.</p>
<h2>Take action today to give yourself options</h2>
<p>The amazing part of my story isn't that I hit whatever milestone so early on. The amazing part is that my strategy is so easily replicated by anyone who's dedicated.</p>
<p>I didn't profit off an amazing investment strategy or some lucky cryptocurrency bubble. Nor did I come into lottery winnings, sell a business, or get promoted to a high-powered career.</p>
<p>Instead, I simply started investing as early as possible, and then designed the lowest-cost lifestyle I was comfortable with. From there, I invested as much as I could in index funds (aka the most simple investment ever) and let compound interest run its magic.</p>
<p>Even if you didn't start investing as early as me, never underestimate the power of compound interest over time. One of the <a href="https://mymoneywizard.com/financial-freedom-quotes/">truest quotes in all of finance:</a></p>
<p style="padding-left: 30px;">"The greatest shortcoming of the human race is our inability to understand the exponential function." &mdash; Albert Bartlett, physicist</p>
<p>As our financial calculator showed, I was shocked to see how much I was underestimating compound interest in my portfolio. Chances are, you are too.</p>
<p>So start investing today. Build yourself a strong base to compound your way towards wealth. Before you know it, you'll find yourself loaded with options, which is exactly what this money game is all about.</p><p><strong>SEE ALSO:&nbsp;<a href="https://www.businessinsider.com/net-worth-tracking-early-retirement-money-advice-2018-6" >I'm 28 and I've saved over $240,000 — here's what I've learned about money from tracking my net worth for the past 2 years</a></strong></p>
<p><strong>DON'T MISS:&nbsp;<a href="https://www.businessinsider.com/money-advice-to-grow-net-worth-early-retirement-2018-5" >I grew my net worth by over $100,000 in 2 years. Here are 4 steps you can take today to do the same.</a></strong></p>
<p><a href="https://www.businessinsider.com/how-to-invest-early-retire-a-millionaire-2018-7#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/avengers-infinity-war-thanos-killed-half-all-life-earth-endangered-species-2019-4">There are 7.7 billion humans on Earth today. Here's what would actually happen if Thanos destroyed 50% of all life on the planet.</a></p> https://www.businessinsider.com/the-european-commission-plans-to-scrap-daylight-saving-hours-2018-8The European Commission wants to scrap daylight saving hours - and there's only a few days left to have your sayhttps://www.businessinsider.com/the-european-commission-plans-to-scrap-daylight-saving-hours-2018-8
Sat, 11 Aug 2018 06:02:00 -0400Elisabeth Hu
<p><img src="https://static2.businessinsider.com/image/5b6db74ce361c090048b467b-1187/shutterstock561021889.jpg" border="0" alt="Clocks daylight saving time" data-mce-source="Shutterstock" /></p><p></p>
<ul>
<li><strong>The European Commission is considering scrapping daylight saving time.</strong></li>
<li><strong>There's one week left to give your opinion on the matter, according to the form on their website.</strong></li>
<li><strong>The effects of abandoning daylight saving time could be extensive, significantly affecting agriculture, health, and internal markets.</strong></li>
</ul>
<hr />
<p>&nbsp;</p>
<p>The European Commission is planning to scrap daylight saving time and there's one week left to give your opinion on the matter, according to <a href="https://ec.europa.eu/eusurvey/runner/2018-summertime-arrangements?surveylanguage=en">the form</a> they have available online.</p>
<p>Open on the European Commission's website until August 16, the proposal was put forward by MEPs last February with the hope of establishing the benefits of the system and whether it needed revising.</p>
<p>As well as choosing whether your contributions are published with your details or anonymously, the form also provides a field where you can indicate whether you're an individual, a Member State or an organisation.</p>
<p>You're then invited to answer five questions on:</p>
<ul>
<li>your feelings about the change</li>
<li>whether you'd prefer to keep or abolish the system for all EU countries</li>
<li>why you'd like to retain or abandon the change</li>
<li>the importance, on a scale of 1 to 10, of the measure to you</li>
<li>whether you'd prefer to keep summer or winter time if daylight saving time were abolished</li>
</ul>
<p><img src="https://static2.businessinsider.com/image/5b6db0f664dce837008b4e46-999/screen shot 2018-08-10 at 163511.png" border="0" alt="Screenshot of EC european commission daylight saving form" data-mce-source="EUSurvey" data-link="https://ec.europa.eu/eusurvey/runner/2018-summertime-arrangements?surveylanguage=en" /></p>
<p>Depending on the outcome of this questionnaire and the overall evaluation of the system, the Commission may well propose that Member States amend the current directive that governs the change throughout the European Union, taking into account that all Member States would have to agree to the amendment if it were to be successfully adopted.</p>
<p>Here are some ways in which Europe could be affected if the amendment were to be implemented.</p>
<h2>Energy</h2>
<p><img src="https://static3.businessinsider.com/image/5b6db08264dce81e008b4e3a-833/1280px-citylightsoftheunitedstates2012.jpg" border="0" alt="us map city lights" data-mce-source="Wikimedia Commons" data-link="http://commons.wikimedia.org/wiki/Category:Maps_of_the_United_States#mediaviewer/File:City_Lights_of_the_United_States_2012.jpg" /></p>
<p>It was originally Benjamin Franklin who first suggested the idea of shifting days by one hour in summer in 1784. He saw the opportunity to save candles by making the most of the sun. The idea was put forward again during the First World War, and the idea was applied again in 1976 after the oil crises caused the cost of energy to shoot up.</p>
<p>Realistically, the energy savings from daylight saving time are very small, according to <a href="http://www.europarl.europa.eu/RegData/etudes/STUD/2017/611006/EPRS_STU(2017)611006_EN.pdf">a study</a> published in October 2017 by the European Parliament. The change in consumption is somewhere between 0.5% and 2.5% depending on the country's latitude.</p>
<h2>Health</h2>
<p><img src="https://static3.businessinsider.com/image/5b2117591ae6621e008b5042-1200/sleeping.jpg" border="0" alt="sleeping" data-mce-source="Omar Havana/Getty Images" /></p>
<p>The MEPs who originally triggered this question referred to numerous studies highlighting the negative effects of daylight saving time on human beings, such as sleep and mood disorders that can lead to depression.</p>
<p>According to <a href="https://journals.lww.com/epidem/Fulltext/2017/05000/Daylight_Savings_Time_Transitions_and_the.7.aspx">a study</a> published in Epidemiology in 2017 carried out with 185,000 subjects, diagnoses of depression during the transition from summer to winter time increase by 11%.</p>
<p>"Chronobiologic research findings suggest that the effect on the human biorhythm may be more severe than previously thought," the Commission said on its site.</p>
<p>Likewise, the transition to summer time has positive effects that are linked to an increase in outdoor activities and long summer evenings.</p>
<h2>Road Safety</h2>
<p><img src="https://static6.businessinsider.com/image/57d1c78809d2931b008b6ba9-1000/traffic-cars-road.jpg" border="0" alt="traffic cars road" data-mce-source="Shutterstock" /></p>
<p>"Evidence remains inconclusive with regard to the relationship between summer time arrangements and road traffic accidents," said the Commission. "In principle, sleep deprivation from advancing the clock in spring could increase the risk of accidents. At the same time, extended daylight hours during summer evenings are considered to have a positive effect on road safety. However, it is generally difficult to attribute directly the effect of summer time arrangements on accident rates compared to other factors."</p>
<h2>Agriculture</h2>
<p><img src="https://static3.businessinsider.com/image/51ffb8f0ecad04d82800000f-1200/cows-4.jpg" border="0" alt="New Zealand cow farm" data-mce-source="Retuers/David Gray" data-link="http://pictures.reuters.com/C.aspx?VP3=SearchResult_VPage&amp;VBID=2C0BXZ6ZEWRGM&amp;SMLS=1&amp;RW=1331&amp;RH=817" /></p>
<p>Where breeding is concerned, the time change triggers a change in milking times, which disrupts the biological rhythm of the animals. Some cows, for example, experience a stress period of about a week, which results in a decrease in milk production and quality.</p>
<p>However, the Commission's report states that these time change disturbances "appear to have largely disappeared due to the deployment of new equipment, artificial lighting and automated technologies", adding that "an extra daylight-hour during summer can also be an advantage allowing extended working hours for outdoor activities, such as working in fields and harvesting".</p>
<h2>Internal markets</h2>
<p><img src="https://static1.businessinsider.com/image/5b6dafdc959f341e2e8b4ca6-1422/euhq.jpg" border="0" alt="European Commission, Union, Brussels, flag" data-mce-source="Greg Sandoval/Business Insider" /></p>
<p>Beyond these main points, the Commission has underlined the possible consequences for the European internal market.</p>
<p>European summer time arrangements have existed since the 1980s and are currently governed by Directive 2000/84/EC, established in 2001.</p>
<p>It outlines the dates for the transition by stipulating that Member States switch to summer time on the last Sunday in March and switch back to winter time on the last Sunday in October.</p>
<p>Whatever the outcome of the consultation, Member States will have to decide unanimously to amend the directive.</p>
<p>The Commission has underlined that "allowing uncoordinated time changes between Member States would be detrimental to the internal market due to higher costs to cross-border trade, inconveniences in transport, communications and travel, and lower productivity in the internal market for goods and services".</p><p><strong>SEE ALSO:&nbsp;<a href="http://uk.businessinsider.com/the-brain-is-wired-to-be-prejudiced-but-you-can-trick-it-not-to-2018-8?r=US&IR=T" >Your brain is wired to be prejudiced towards strangers</a></strong></p>
<p><a href="https://www.businessinsider.com/the-european-commission-plans-to-scrap-daylight-saving-hours-2018-8#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/what-happens-when-hold-in-your-pee-too-long-2018-6">Here's what can happen if you hold your pee too long</a></p> https://www.businessinsider.com/best-advice-money-millennial-saver-investor-2017-9I'm 27 and I've saved $200,000 — here are the 7 best pieces of advice I can give you about moneyhttps://www.businessinsider.com/best-advice-money-millennial-saver-investor-2017-9
Fri, 13 Jul 2018 17:14:00 -0400The Money Wizard
<p><img style="float:right;" src="https://static5.businessinsider.com/image/59c978e025acc21e008b5d08-667/shutterstock380188981.jpg" border="0" alt="man suit wealth" data-mce-source="Alex Yakimovski/Shutterstock" /></p><p><em>The Money Wizard is a blogger who goes by the pen name Sean. He works as a financial analyst and has saved nearly $200,000 through retirement accounts and investing in low-cost index funds. He hopes to retire by his late 30s.</em></p>
<p>&nbsp;</p>
<p>When I was 16 years old, I hung up my hard hat after another brutal day digging ditches under the Texas sun. That day was special, because it was payday, and I'd finally have enough money to pass $500 in my bank account.</p>
<p>&nbsp;</p>
<p>By the time I was 18, that $500 had grown enough to start investing in the stock market.</p>
<p>&nbsp;</p>
<p>By age 25, I had $100,000, and by age 26 &mdash; $150,000. I'm now 27 years old, and <a href="http://mymoneywizard.com/net-worth-update-august-2017/">I've saved nearly $200,000</a>.</p>
<p>&nbsp;</p>
<p>The way the storyline plays out, you'd think I was either a stock picking genius or a fast-paced career superstar.</p>
<p>&nbsp;</p>
<p>The truth is, I'm neither of those. My stock investments mostly underperformed compared to the benchmarks, and until very recently, my salary wasn't much more than the average income in my city.</p>
<p>&nbsp;</p>
<p>In reality, I'm a normal guy with a decent job, who was lucky enough to stumble onto some money tips early in life. Here are my seven best:</p>
<h2>&nbsp;</h2>
<h2><strong>1. Get a degree that actually pays</strong></h2>
<p>&nbsp;</p>
<p>These days college gets a pretty bad rep. And I agree, the skyrocketing price of tuition is concerning. But I'm also with Warren Buffett on this one &ndash; the best investment you can ever make is in yourself.</p>
<p>Here's the key. You need to view college for what is: a 4-year transaction to purchase a career. <em>Especially</em> when student loans are involved.</p>
<p>And just like you wouldn't take out a mortgage before researching the value of a house, it's equally important to consider the value of a degree.</p>
<p>Some degrees pay well, others... not so much.<a href="https://www.businessinsider.com/highest-paying-college-majors-2016-10"> Research salary statistics</a>, interview people in the field, and attend career fairs.</p>
<p>As a finance and economics major, I was able to quickly find a job as a financial analyst, even at a time when the labor market was iffy about its economic recovery. Now I hope my strategically chosen degree continues building a foundation for a lifetime of earnings.</p>
<p>&nbsp;</p>
<h2><strong>2. Avoid consumer debt</strong></h2>
<p>&nbsp;</p>
<p>Once you're out of school and on your way to making money, the next best step is to avoid the trap of consumer debt.</p>
<p>Put simply, it's nearly impossible to build wealth if you're leaking money every month through auto loans and credit card debt.</p>
<p>Benjamin Franklin, one of the country's<a href="http://mymoneywizard.com/three-famous-early-retirees-will-surprise/"> first early retirees</a>, famously said that a small leak will sink a great ship. And he's right; trying to build wealth while paying interest is like rowing against the current. With a leaky boat.</p>
<p>In order to avoid debt, I bought my $13,000 car without a loan, and although I use credit cards for the rewards points, I've never paid a cent of interest.</p>
<p>This keeps compound interest working for me, rather than forcing myself to swim against the current.</p>
<p>&nbsp;</p>
<h2>3. <strong style="color: #000000;">Embrace index funds</strong></h2>
<p>&nbsp;</p>
<p>Like most beginning investors, when I started investing I imagined myself the next Warren Buffet. All my stock picks were sure home runs, I thought, and I'd be crushing the market in no time.</p>
<p>In reality, my not-so-hot stock choices lagged the indexes. By the end, my ambition mixed with greed cost me thousands of dollars.</p>
<p>This shouldn't have been a surprise. There's simply too much proof &ndash; individual stock pickers, traders, and actively managed mutual funds just can't compete with the efficiency of index funds.</p>
<p>Don't try to outsmart the market; you're fighting a losing battle. Instead, save yourself the time AND money by choosing a low-fee index fund.</p>
<p>&nbsp;</p>
<h2><strong style="color: #000000;">4. Decide if your spending is actually making you happy</strong></h2>
<p>&nbsp;</p>
<p><a href="https://www.bls.gov/news.release/cesmy.nr0.htm">Government surveys</a> show that 52% of the average person's budget is spent on housing, cars, and materialistic purchases.</p>
<p>Does a house with all those extra bedrooms really make your life happier, or are you just creating more work for yourself?</p>
<p>When you part with your money, are you carefully calculating the potential benefits, or are you just following what your friends, society, and billions of dollars of advertising is telling you to do?</p>
<p>For me, I realized stainless steel appliances and granite countertops weren't impacting my life, so I chose a more mediocre apartment to save hundreds each month in rent. I also decided my morning commute would be pretty similar whether I was driving a $30,000 car or a $13,000 one, so I found a ride cheap enough to buy in cash.</p>
<p>Figure out how to reduce your no-fun spending to the bare bones, and saving becomes a breeze. The best part? If you decide something really will make you happy, you'll easily be able to afford the splurge.</p>
<p>&nbsp;</p>
<h2><strong style="color: #000000;">5. Tax advantages are, you know&hellip; advantages. Use them!</strong></h2>
<p>&nbsp;</p>
<p>Retirement accounts, like a 401(k) or IRA, grow tax free. In the case of a traditional retirement account, you only pay taxes on the back end. For a Roth account, you only pay taxes on the front end.</p>
<p>Compared this to a non-retirement account, where you have to pay taxes on the back end, front end, and even some of the middle&hellip; end. These tax advantages are huge!</p>
<p>Even a retirement account with slightly higher fees<a href="http://mymoneywizard.com/should-i-invest-401k-high-fees/"> allows your money to grow faster</a>, which means you can retire hundreds of thousands of dollars richer.</p>
<p>I still remember using one nervous click of the mouse to raise my 401(k) contributions from 5% to over 25% of my salary. The decision paid off though, and my nerves were quickly eased when I saw the staggering speed your money can grow without the constant drag of taxes.</p>
<p>&nbsp;</p>
<h2><strong style="color: #000000;">6. Avoid lifestyle inflation</strong></h2>
<p>&nbsp;</p>
<p>As we move through life, it's easy to want to spend more and more money rewarding ourselves. Most people give into this temptation, start jealously eyeing the latest purchases of their friends, and begin inflating their lifestyles accordingly.</p>
<p>These over inflated lifestyles feed off each other, creating a vicious cycle of "keeping up with the Joneses." Like a giant bubble, the lifestyles grow so big there's eventually nowhere else to go. The Joneses are tapped out, and they're left no choice but to spend all their time and money protecting their over-inflated bubbles from anything that could cause a pop.</p>
<p>I say, screw the Joneses. Chances are, they're a financial mess and can't afford most of what they're buying anyway.</p>
<p>Instead, recognize that your life is already awesome, and hold steady. Your savings, and ultimately your lifestyle, will blow past the Joneses in no time.</p>
<h2>&nbsp;</h2>
<h2><strong>7. Wealth is built through consistency, not home runs.</strong></h2>
<p>&nbsp;</p>
<p>Shortly behind never getting started, one of the most common investing mistakes people make is investing too aggressively.</p>
<p>It's an understandable mistake to make. Our minds aren't really designed to intuitively grasp the incredible power of compound interest, and trying to envision years into the future quickly fogs into a hazy blur.</p>
<p>As a result, many beginning investors mistakenly think the only way to get rich is to take huge risks. They swing for the fences, then find themselves frustrated when their dangerous bets lose money.</p>
<p>As I look back on my path so far, I'm amazed by something simple. I haven't hit any jackpots. Hell, I haven't even come close. I didn't create a hugely profitable company, I didn't get rich quick on a 10-bagger stock, and I didn't strike gold on any highly leveraged real estate deals.</p>
<p>Instead, almost all my investments are pretty darn boring. I invested in low-fee index funds, took advantage of retirement accounts, and consistently saved a lot of money.</p>
<p>I wasn't swinging for the fences. I've just hit a lot of singles, over and over again.</p>
<p>We live in an incredible time of opportunity. The 401(k) account exists. Tax rates are low, at least historically. And the invention of the index fund means anyone with access to a phone or computer can outperform hot shot money managers, and pay only pennies to do so.</p>
<p>The singles are there for the taking. Keep shooting for singles, and before you know it, you'll realize you've hit a home run.</p>
<p>&nbsp;</p>
<p><em>Sean writes for the blog </em><a href="http://mymoneywizard.com/"><em>MyMoneyWizard.com</em></a><em>, where he shares his plans for reaching complete financial independence by his late 30s.</em></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/how-stop-overspending-2017-6" >A 27-year-old with $181,000 in the bank explains the simple calculation that keeps him from overspending</a></strong></p>
<p><strong>DON'T MISS:&nbsp;<a href="http://www.businessinsider.com/how-to-manage-money-50-20-30-budget-2017-8" >Many people make the same mistake when they compare their wealth to everyone else's — here's how to avoid it</a></strong></p>
<p><a href="https://www.businessinsider.com/best-advice-money-millennial-saver-investor-2017-9#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/personal-financial-expert-tracking-spending-strategy-money-budget-2017-8">A financial planner reveals the 2 easiest ways to improve your finances</a></p> https://www.businessinsider.com/7-research-backed-ways-to-save-more-money-with-less-effort-2018-17 research-backed ways to save more money with less efforthttps://www.businessinsider.com/7-research-backed-ways-to-save-more-money-with-less-effort-2018-1
Thu, 04 Jan 2018 14:51:11 -0500Shen Lu
<p><img src="https://static4.businessinsider.com/image/5a4e7d23c32ae68b008b47c1-889/shutterstock270714470.jpg" alt="man relaxing vacation" data-mce-source="Kaspars Grinvalds/Shutterstock"/></p><p></p>
<ul>
<li><strong>Saving money for retirement and unforeseen expenses can be difficult — but there are strategies you can use to make it easier. </strong></li>
<li><strong>The first step is understanding your weaknesses for spending money. </strong></li>
<li><strong>Then, automate your savings, set a plan with negative consequences, focus on small goals first, and track your spending.</strong></li>
</ul>
<hr/>
<p><br/>We all know we should save money for retirement and unexpected mishaps like that broken heater in middle of winter. But, like many tasks in our lives, saving for the future is easier said than done. <span data-ccp-props="{&#34;201341983&#34;:0,&#34;335559739&#34;:160,&#34;335559740&#34;:259}"> </span></p>
<p>Despite historically low unemployment rates and increasing household income, Americans still <a href="https://www.magnifymoney.com/blog/news/back-to-our-pre-recession-ways-americans-are-spending-more-and-saving-less1132977656/">aren&#39;t the greatest savers</a>. The average American saved just <a href="https://fred.stlouisfed.org/series/PSAVERT#0">a little over 3 percent</a> of their disposable personal income in October, according to the U.S. Bureau of Economic Analysis. That&#39;s compared with savings rates of 19.3 percent in Japan and 5.5 percent in the United Kingdom, according to <a href="https://tradingeconomics.com/united-kingdom/personal-savings">Trading Economics</a>, a global economic data provider.<span data-ccp-props="{&#34;201341983&#34;:0,&#34;335559739&#34;:160,&#34;335559740&#34;:259}"> </span></p>
<p>Of course, many workers struggle to save simply because their day-to-day expenses eclipse their earnings. But sometimes, a lack of savings could be more of a psychological phenomenon than a monetary one. Research regularly shows that saving money demands a great deal of forethought, self-control and willpower — capabilities that are in direct conflict with our innate desires for pleasure and satisfaction in the here and now.<span data-ccp-props="{&#34;201341983&#34;:0,&#34;335559739&#34;:160,&#34;335559740&#34;:259}"> </span></p>
<p>Nobel Prize laureate and renowned behavioral economist Richard Thaler said in <a href="https://www.wsj.com/articles/behavioral-economist-richard-thaler-on-the-key-to-retirement-savings-1448852602">an interview</a> with The Wall Street Journal that saving for retirement is &#34;cognitively hard&#34; and that it&#39;s &#34;obviously preposterous&#34; to assume that everybody will figure out how much they have to save and actually carry out the plan.<span data-ccp-props="{&#34;201341983&#34;:0,&#34;335559739&#34;:160,&#34;335559740&#34;:259}"> </span></p>
<p>The key to saving more is understanding your weaknesses and using tools and strategies that can help you do the right thing without having to think too hard about it. <span data-ccp-props="{&#34;201341983&#34;:0,&#34;335559739&#34;:160,&#34;335559740&#34;:259}"> </span></p>
<p>We&#39;ve done the hard part for you and found research-backed methods that may help you save more. Follow the tips below to start saving more — and saving smarter — in 2018.<span data-ccp-props="{&#34;201341983&#34;:0,&#34;335559739&#34;:160,&#34;335559740&#34;:259}"> </span></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/how-i-paid-off-24000-in-credit-card-debt-in-just-15-months-2018-1" >How I paid off $24,000 in credit card debt in just 15 months</a></strong></p>
<h3>1. Think present. Act now.</h3>
<img src="https://static1.businessinsider.com/image/5a4e7d993225ded5018b475e-400-300/1-think-present-act-now.jpg" alt="" />
<p><p>The first step to solving your debt problem may be to understand your personality &mdash; more specifically, how you think and feel about time. That's because <strong>time orientation</strong>, or the way we think about time in relation to our goals, plays a major role in people's ability to save.</p>
<p>In a 2014 <a href="http://journals.sagepub.com/doi/abs/10.1177/0956797613512129">paper</a> published in "Psychological Science," scholars Leona Tam and Utpal Dholakia concluded that individuals who think about savings cyclically &mdash; seeing life events as a series of repeating experiments &mdash; are estimated to save 74 percent more than those who think linearly. People with linear time -orientation view life in past, present and future terms.</p>
<p>Tam and Dholakia found that those with a cyclical mentality will likely save over time because they tend to believe that their future situation will be similar to what it is now. Rather than being overly optimistic about their savings potential in the future, which might cause them to put off saving money until later in life, these people will go ahead and start saving now. And by focusing on saving in the present, they are more likely to make it a routine.</p>
<p>On the other hand, those who think about life in past and future terms may be more likely to put off savings longer because they feel they'll be better prepared to save later in life.</p>
<p>"The belief is that if you perform an action in the current cycle now, you will be more likely to perform this particular action in the next cycle," Tam and Dholakia wrote. "But if you do not perform now, you will be less likely to perform it in the next cycle."</p>
<p>The importance of time perspective is also underlined in a 2014 <a href="http://www.magnifymoney.com/timeperspective/results.php">study</a> performed by renowned psychologist Philip Zimbardo in partnership with MagnifyMoney. The study looked at how people's perception of time impacted their financial health.</p>
<p>After surveying 3,049 participants in six countries, Zimbardo, co-author of <a href="http://www.thetimeparadox.com/">"The Time Paradox,"</a> found that individuals who make decisions based on negative past memories tend to be in good financial health. They are more conservative and likely to save for their future to avoid a repeat of previous negative experiences.</p>
<p>In contrast, those future-oriented optimists are more likely to make bad financial choices and be less financially healthy.</p>
<p>But out of the three time orientations &mdash; past, present, or future &mdash; the group that was in the worst financial shape was the present-minded one. These people are more likely to focus on the here and now, leading them to make impulsive decisions without considering their future.</p></p>
<br/><br/><h3>2. Automate your savings</h3>
<p><p>Yes, it's just that simple. Behavioral economists have concluded that in order to save more money, you have to make saving as easy as possible and spending as difficult as possible.</p>
<p>"If people have to actively think about saving, then they probably won't do it," Shlomo Benartzi, a behavioral economist at the University of California, Los Angeles, wrote in the <a href="https://hbr.org/2017/12/how-digital-tools-and-behavioral-economics-will-save-retirement">"Harvard Business Review"</a> earlier this year. Automated deposits are the most effective way to save for retirement, he argued.</p>
<p>U.S. companies are increasingly changing their 401(k) enrollment policies from requiring employees to "opt-in" to participate into new ones where workers are automatically enrolled upon employment and are required to "opt-out" if they would like to avoid enrollment. Because that dropout action requires extra time and effort, fewer people would withdraw from their 401(k) plans.</p>
<p>A 2005 <a href="https://www.urban.org/sites/default/files/publication/51271/1000751-The-Automatic--k-A-Simple-Way-To-Strengthen-Retirement-Saving.PDF">study</a> by William G. Gale, J. Mark Iwry, and Peter Orszag found that workers are more likely to save for retirement if they are automatically enrolled in a company 401(k) plan than if they were given the choice to opt in.</p>
<p>Besides participating in your company's retirement plan, you can also auto-save a portion of your salary to your savings account. Many employers set up automatic deposits from your paycheck into multiple checking or savings accounts. You can have a portion of your paycheck automatically transferred into a savings account so that you will be less inclined to touch that money. This might make it easier for you to resist the temptation to spend.</p></p>
<br/><br/><h3>3. Automate periodic savings increases</h3>
<img src="https://static5.businessinsider.com/image/5a4e7de13225de7d018b47a0-400-300/3-automate-periodic-savings-increases.jpg" alt="" />
<p><p>This is auto-saving 2.0.</p>
<p>Thaler and Benartzi carried out their well-known "<a href="http://www.journals.uchicago.edu/doi/pdfplus/10.1086/380085">Save More Tomorrow" study</a> from the late 1990s to early 2000s, following more than 21,000 workers at three different companies.</p>
<p>In one portion of the three-part study, the researchers followed 315 workers at an unnamed manufacturing company. About 160 workers elected to increase their 401(k) contributions each year for four years and 32 of them opted out over the years.</p>
<p>In the end, they found the majority of the people who agreed to the annual contribution increases nearly quadrupled their saving rates.</p>
<p>The success of the program shows the power of <strong>inertia</strong> &mdash; the tendency for objects or people to continue moving in a certain direction unless they take action to change it. Once their savings strategy was set &mdash; increasing annually with their raises &mdash; very few people ever got around to changing their savings allocations again once they enrolled.</p>
<p>You can mimic these results on your own as well. If you are comfortable enough to start saving more, try adding 1 percent more to your retirement fund every six months. Some retirement plans even offer automatic step-up contributions, where your contributions are automatically increased by 1 or 2 percent each year.</p>
<p>Larry Heller, a New York-based certified financial planner and president of Heller Wealth Management, suggested that you increase your contribution amount for the next three pay periods and repeat until you hit your maximum.</p>
<p>"You will be surprised that many people can adjust with a little extra taken out of their paycheck," Heller told MagnifyMoney.</p></p>
<br/><br/><h3>4. Set an actionable plan with negative consequences</h3>
<p><p>One of the big reasons why people fail to save more is a lack of motivation. Dean Karlan, an economics professor at Yale University, created the <a href="https://karlan.yale.edu/sites/default/files/annualreviewedits4.pdf">&ldquo;commitment contract&rdquo;</a> theory, arguing that establishing the economic penalty for failure of saving helps people hit their savings goal.</p>
<p>Here is how the commitment contract works: It allows people to set a positive goal, for instance, to save more money or to set a New Year&rsquo;s resolution. If they fail to accomplish the goal, they may be subjected to some form of penalty per the terms of their contract.</p>
<p>The idea is that your motivation to save money is enhanced by a contract where negative consequences are imposed if conditions are not met.</p>
<p>For example, a die-hard animal rights activist might develop a commitment contract to save $2,000 in five months for an international trip, with the stipulation that if this person violates the contract, he or she must buy a $70 ticket to a SeaWorld theme park.</p>
<p>There doesn&rsquo;t appear to be a savings app that will implement economic punishments if you didn&rsquo;t hit your savings goal. But you can: join a <a href="http://www.magnifymoney.com/blog/news/women-paid-off-262000-worth-debt-using-accountability-groups/">like-minded accountability group</a> on social media, or ask a friend or family member to be your accountability partner. They could play the &ldquo;bad cop&rdquo; for you while you are saving toward a goal. The hope is that you will feel the pressure to carry out your plan under supervision, in addition to the contract you have committed to. And if you miss the target, this partner would ruthlessly urge you to pay your penalty.</p></p>
<br/><br/><h3>5. Focus on smaller goals first</h3>
<img src="https://static4.businessinsider.com/image/5a4e7e533225de7d018b47a8-400-300/5-focus-on-smaller-goals-first.jpg" alt="" />
<p><p>Now you know you need to establish a savings goal, but it might be daunting to even think about achieving that goal.</p>
<p>Experts found that breaking down the goal into manageable pieces spurs confidence, even though the ultimate amount of money that would be saved is exactly the same.</p>
<p>Benartzi and his colleagues at UCLA asked a group of participants if they would like to save $5 every day, and another group if they wanted to save $35 a week, and the third group whether they thought they could save $150 a month. The results were astonishing: Nearly 30 percent of the participants said they could save $5 a day, while just 7 percent elected to save $150 a month.</p>
<p>Bloggers have popularized the $5 savings challenge as well, where people were encouraged to save every $5 bill they come across in their wallet instead of spending it. One woman claimed she <a href="https://savemoneyfastwithfives.wordpress.com/">saved $40,000 over 13 years</a>&nbsp;just by socking away her $5 bills.</p>
<p>Let's say you want to make it easier to save for an iPhone X (about $1,000) in seven months. Instead of telling yourself you'll save $150 per month, break it down even further by committing to save $5 per day. You might achieve that by cutting back on your daily dining-out budget. Just take it one baby step at a time.</p>
<p>And you don't have to literally take the money out of your wallet. You could use an app that helps you save in small amounts over time as well.</p>
<p><a href="https://digit.co/">Digit</a> connects to your checking account and tries to find spare money in your account to transfer to your Digit savings account. You can command the app via text messaging to save more, deposit money into savings, or transfer money back to your checking account. Note: the app is free to use for the first 100 days. After that, it charges $2.99 per month.</p>
<p>There is also ;<a href="https://www.acorns.com/">Acorns</a>, a microsavings app that automatically invests a small amount of money daily, weekly or monthly for you. One of Acorn's interesting features is it rounds up your purchases to the nearest full dollar amount and makes the change available for you to invest. Let's say you used a credit card to buy a cup of coffee for $2.75. You can choose to invest the 25 cents on the app, or Acorn will invest the change for you if you elected automatic roundups investment. It's free to open an Acorns account. The app charges $1 per month if your balance is under $5,000, or 0.25 percent per year if your balance is $5,000 or more.</p>
<p>We've reviewed microsavings apps, including Acorns. Read more about their features <a href="http://www.magnifymoney.com/blog/reviews/investing-apps-acorns-stash-betterment-robinhood884245432/">here</a>.</p></p>
<br/><br/><h3>6. Save that big windfall</h3>
<p> <p>Scholars Peter Tufano and Daniel Schneider wrote in a 2008 <a href="http://www.hbs.edu/faculty/Publication%20Files/08-075_175a6fd6-84d3-46af-96a6-4aff348deb27.pdf">paper</a> that it's relatively easier for people to save lump-sum distributions because they perceive those funds differently from their regular income. An annual tax refund, inheritance, performance bonus, or graduation or wedding gifts are seen more like an unexpected surplus of money.</p>
<p>When you get that big year-end bonus or your tax check in the 2018 tax season, you may want to save the large portion of the refund while putting a smaller amount in your checking account. You will feel good saving for durable items, such as household appliances, a car, or a down payment but leaving a little room for the occasional self-indulgence.</p> </p>
<br/><br/><h3>7. Track your spending</h3>
<img src="https://static2.businessinsider.com/image/5a4e7e963225deee018b4798-400-300/7-track-your-spending.jpg" alt="" />
<p><p>You thought you knew how much you spent in Starbucks each month, but you might be surprised by the actual dollar amount going into coffee once you start tracking your expenses.</p>
<p>Benartzi and fellow researcher Yaron Levi <a href="https://www.personalcapital.com/land/assets/pdf/Economic_Behavior_in_the_Digital_Age.pdf">reported</a> that those who used a mobile app that tracked spending and investment performance cut back on their spending by 15.7 percent.</p>
<p>Their findings align with results from a 2016 <a href="https://www.federalreserve.gov/econresdata/mobile-devices/2016-executive-summary.htm">Federal Reserve study</a>: About 62 percent of consumers with access to mobile banking checked their account balance on their phone before making a big purchase, and half of them decided not to buy that item because they were informed of their real-time account balance and credit limit.</p>
<p>It's time to download a budgeting app that aggregates all your financial accounts &mdash; debit and credit cards, retirement accounts, brokerage accounts, and so on. Once you get an accurate sense of your finances, you may think twice before buying that $1,000 Canada Goose parka.</p>
<p>We've ranked popular budgeting apps. Check out the <a href="http://www.magnifymoney.com/compare/budget-apps/">reviews</a> here.</p></p>
<br/><br/> https://www.businessinsider.com/5-reasons-youll-probably-never-be-rich-2017-125 reasons you'll probably never be richhttps://www.businessinsider.com/5-reasons-youll-probably-never-be-rich-2017-12
Wed, 20 Dec 2017 15:01:09 -0500Christy Bieber
<p><img src="https://static2.businessinsider.com/image/5a3abed94aa6b5570a8b62c2-1777/gettyimages-516156162.jpg" alt="man thinking stressed contemplating" data-mce-source="Ben Pruchnie/Getty Images"/></p><p></p>
<ul>
<li><strong>Most people won&#39;t become rich because they owe more than they&#39;re worth. </strong></li>
<li><strong>But it is possible to become a millionaire by changing a few money habits. </strong></li>
<li><strong>When you get a bonus or a raise, put that money toward your savings, instead of giving in to lifestyle creep. </strong></li>
<li><strong>Pay off credit card debt and buy used cars to avoid paying interest on depreciating assets. </strong></li>
<li><strong>You should also keep a closer eye on your investments.</strong></li>
</ul>
<hr/>
<p><br/>It takes $2.4 million to be considered rich in the United States, according to a 2017<span> </span><a href="http://pressroom.aboutschwab.com/press-release/schwab-investor-services-news/cents-and-sensibility-schwab-survey-finds-americans-defi" target="_blank" rel="noopener">Charles Schwab</a><span> </span>survey. That&#39;s close to 30 times the median net worth of U.S. households. </p>
<p>With just 10.8 million millionaires in the entire country in 2016, most people won&#39;t come anywhere near that $2.4 million magic number. In fact, around 16.6 million American families have a<span> </span><a href="https://www.fool.com/retirement/2017/05/14/166-million-us-households-have-a-negative-net-wort.aspx">negative net worth</a> and owe more than they own. </p>
<p>If you don&#39;t want to be one of the millions whose net worth is too low for your liking, it&#39;s time to look at what you may be doing to sabotage your efforts to build real wealth.</p>
<p>The good news is, with a few simple tweaks, you very well could join the ranks of the millionaires — even if your salary is just average.</p>
<h2>1. You aren&#39;t banking your raises</h2>
<p>The data is clear: As income goes up, spending goes with it. What&#39;s more, many Americans in the most common income brackets are spending somewhere around 90% or more of after-tax take-home pay. </p>
<p>That spending so closely tracks income suggests Americans who get raises increase expenses until funds flowing out match funds coming in. Most of this money goes to big-ticket items — cars and homes — which are illiquid assets often accompanied by loans that are difficult to escape from.. </p>
<p>While lifestyle creep is common, families who avoid it are far better off. Take an average 30-year-old earning $4,000 monthly. A 3% annual raise would bump the worker&#39;s salary to $55,645 by age 35. What if, instead of spending the extra $7,645 in annual income, it was invested each year from age 35 to 65 in a 401(k) earning 8%? The industrious worker who invested his or her raise would end up with a nest egg of $866,050. Not $2.4 million, but more than 10 times the median net worth for American households — just from pocketing a few years&#39; raises. </p>
<p>You can be that worker. When your boss raises your salary, go directly to HR to set up automatic transfers of the extra cash to your 401(k). You&#39;ll never get used to the money, spending won&#39;t increase, and you&#39;ll be on your way to becoming wealthy. </p>
<h2>2. You&#39;re paying interest on depreciating assets</h2>
<p>America is a nation of debtors. In the third quarter of 2017, households collectively owed $12.96 trillion, according to the<span> </span><a href="https://www.newyorkfed.org/microeconomics/hhdc.html" target="_blank" rel="noopener">Central Reserve Bank of New York</a>. Being in debt is costly, with the average American paying more than $8,000 in annual interest. </p>
<p>Some debts, like mortgage and student loan debt, are considered &#34;good&#34; debts because education increases earning power and real estate usually goes up in value. But car loans and credit card interest are definitely not good debt. Paying interest on these debts is a big loser because the car and whatever you charged on your credit card lose value immediately. </p>
<p>Many Americans buy new cars so regularly, they spend just six years of a 45-year working life without a car loan. If you stop this cycle starting at age 35, pay cash for reliable used cars, and invest the savings from not constantly paying a car loan, you&#39;d end up with<span> </span><a href="https://www.fool.com/retirement/2017/08/24/how-your-car-might-crush-your-retirement-dreams.aspx">more than $294,000 in your retirement account</a>. Add that to the $866,050 you&#39;re saving by banking your raises, and you&#39;ve got more than $1 million. </p>
<p><a href="https://www.fool.com/credit-cards/2017/05/11/how-to-pay-off-credit-card-debt-a-step-by-step-gui.aspx">Pay off the credit cards</a>, starting at 35, and invest the $855 per year saved from interest. You&#39;d have another $96,857 to add to your growing stash of cash.</p>
<h2>3. You&#39;re relying solely on Social Security to provide for your retirement</h2>
<p>Speaking of retirement, if you&#39;re not saving for it, not only will you not become rich but you&#39;re also likely to struggle as a senior. However, a quarter of millennials and more than four in 10 pre-retirees 50 and over plan to rely on Social Security as a major source of retirement income, according to a 2017<span> </span><a href="https://news.gallup.com/poll/211085/nonretirees-rely-social-security.aspx" target="_blank" rel="noopener">Gallup poll</a>.</p>
<p>The problem is, the most recent report from the Social Security Administration shows average benefits for retirees — which vary based on age of retirement — would produce far too little income for most seniors to live on. </p>
<p><a href="https://www.fool.com/investing/2017/10/24/4-reasons-you-cant-live-on-social-security.aspx">Living on Social Security alone</a><span> </span>puts you near the federal poverty level and leaves little disposable income to cover high<span> </span><a href="https://www.fool.com/retirement/2017/04/03/even-with-medicare-seniors-may-need-up-to-350000-t.aspx">healthcare costs</a><span> </span>seniors often must pay. And not only are Social Security benefits<span> </span><a href="https://www.fool.com/investing/2017/11/11/how-are-social-security-raises-calculated.aspx">insufficient to keep up with costs of living</a>, but there are also<span> </span><a href="https://www.fool.com/retirement/2017/02/13/is-social-security-going-broke.aspx">serious concerns</a><span> </span>about the program&#39;s solvency.</p>
<p>Bottom line: If you rely on Social Security to take care of you, prosperity is definitely not in the cards. </p>
<h2>4. You&#39;re delaying your retirement savings</h2>
<p>Waiting too long to save for retirement is a key reason many Americans won&#39;t end up rich. While you can invest a reasonable amount of an average income and<span> </span><a href="https://www.fool.com/retirement/2017/04/25/can-you-actually-become-a-millionaire-on-an-averag.aspx">retire a millionaire</a><span> </span>if you start young, as this chart shows, delaying makes it almost impossible to amass $1 million or more. Chart data is based on investing the same amount throughout your career in a retirement account earning 7%. Income is based on the median pre-tax earnings at the end of 2016. </p>
<p><span>If you wait until 40 to start saving, you&#39;d need to put aside almost $14,000 more annually than if you&#39;d started at 20. By delaying, you&#39;re jeopardizing your chances of becoming wealthy. </span></p>
<h2>5. You aren&#39;t keeping a careful eye on your investments</h2>
<p>The majority of 401(k) participants have no idea what their plans cost or what fees they&#39;re paying. If you&#39;re one of them, the loss of your financial security may be the price paid for inattention. As this chart shows, fees could cost more than $350,000, depending on just how much you pay. </p>
<p>You could also miss out on your chance to become rich if you don&#39;t have<span> </span><a href="https://www.fool.com/investing/2017/10/10/want-to-retire-in-comfort-youll-need-to-take-some.aspx">enough of your portfolio in stocks</a> or if you don&#39;t<span> </span><a href="https://www.fool.com/investing/general/2016/01/16/your-financial-new-years-resolution-rebalance-your.aspx">rebalance your portfolio periodically</a>. When you&#39;ve made the effort to invest, don&#39;t neglect basic account management necessary to make your money work for you. </p>
<h2>Becoming rich is within your reach</h2>
<p>Knowing the mistakes that hold you back is key to putting yourself on the path toward true prosperity. Whether this means you join that elite 3% of the population with more than $1 million or you simply save enough to have a little peace of mind, it&#39;s worth the effort. </p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/retiring-early-financial-independence-possible-easy-2017-12" >I'm on track to retire early, just like my father and my cousins did — and we all have the same thing in common</a></strong></p>
<p><a href="https://www.businessinsider.com/5-reasons-youll-probably-never-be-rich-2017-12#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/game-of-thrones-arya-kills-night-king-battle-of-winterfell-season-8-episode-3-2019-5">16 clues that foreshadowed Arya's big moment at the battle of Winterfell in 'Game of Thrones'</a></p> https://www.businessinsider.com/best-money-advice-financial-planner-millennials-2017-11I'm a financial planner — here's the single best piece of advice I can give you about money in your 30shttps://www.businessinsider.com/best-money-advice-financial-planner-millennials-2017-11
Mon, 04 Dec 2017 09:47:00 -0500Eric Roberge
<p><img src="https://static5.businessinsider.com/image/5a1c6e753dbef4460e8b8543-1206/eric roberge official headshot - sept 2017.jpg" alt="Eric Roberge" data-mce-source="Dina Konovalov" data-link="http://dinakphotography.com/" /></p><p></p>
<ul>
<li><strong>Eric Roberge&nbsp;is a certified financial planner and founder of <a href="http://beyondyourhammock.com/">Beyond Your Hammock</a>.&nbsp;</strong></li>
<li><strong>He&nbsp;tells his 30-something clients the key to building wealth is spending less than you think you can afford.&nbsp;</strong></li>
<li><strong>Looking rich and acting rich are not the same as being rich, Roberge says.</strong></li>
</ul>
<hr />
<p>&nbsp;</p>
<p>If you want to be rich, you need to stop trying to <em>look</em> rich.</p>
<p>Here's the trap many 30-somethings fall into: You live in a swanky place in your town because you finally earn enough money to afford some nice digs. You look at your coworker or your neighbor and you see the fancy material things they have, or the lavish vacations they take.</p>
<p>And you believe they're rich because of these things. Because you <em>also </em>want to be rich, you start doing the things they're doing in order to get there.</p>
<p>But guess what? They're probably not rich!</p>
<p>Yes, of course there are people out there who have significant wealth who can buy whatever they want without consequence.</p>
<p>But the vast majority of people who look rich are just that. They <em>look</em> like they have wealth.</p>
<p>If you could look at their bank accounts and financial statements, you'd probably find that they're spending more than they can afford&hellip; and this is the person you emulate in an effort to get rich yourself.</p>
<p>You replicate what they're doing and end up in the exact same boat. You spend more than you can truly afford. You act rich, but never actually become rich.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/bad-spending-habits-rich-people-avoid-2017-11" >Bad spending habits that rich people always avoid</a></strong></p>
<p><strong>DON'T MISS:&nbsp;<a href="http://www.businessinsider.com/best-money-advice-millennials-financial-planner-2017-11" >I'm a financial planner — here are the best 7 pieces of advice I can give you about money in your 30s</a></strong></p>
<h3>Looking and acting rich are not the same thing as being rich</h3>
<img src="https://static1.businessinsider.com/image/5a186d043dbef4cf008b819f-400-300/looking-and-acting-rich-are-not-the-same-thing-as-being-rich.jpg" alt="" />
<p><p>The author of <a href="https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474"><em>The Millionaire Next Door</em></a> and <a href="https://www.amazon.com/Stop-Acting-Rich-Living-Millionaire/dp/1118011570"><em>Stop Acting Rich and Start Living Like a Real Millionaire</em></a><em>, </em>Thomas Stanley, called this aspirational spending. And it will kill your ability to build wealth.</p>
<p>Aspirational spending tends to happen when you believe you will be rich one day, and you just need to start acting rich now while you're on your way.</p>
<p>But the very act of acting rich today is what prevents you from ever becoming rich.</p>
<p>Again, most people who spend a lot <em>don't </em>have a lot (unless they came from an extremely wealthy family and have oodles of money that they can dive into like Scrooge McDuck).</p>
<p>But we've all experienced the <a href="https://www.aicpa.org/press/pressreleases/2016/keeping-up-with-the-joneses-goes-online.html">pressure to keep up with the Joneses</a> that comes from our society and culture. It's really, really tough to ignore what people around you are doing, what your family and friends do, and what advertisers and marketers tell you to do to be happy.</p>
<p>If you give in to that pressure to "keep up" and keep spending, you end up in this never-ending rat race where the only thing at the finish line are a few status symbols and an exhausted, empty bank account.</p></p>
<br/><br/><h3>What happens when you don't overspend, but spend at least as much as you earn</h3>
<img src="https://static4.businessinsider.com/image/5a21b2033dbef4460e8b974e-400-300/what-happens-when-you-dont-overspend-but-spend-at-least-as-much-as-you-earn.jpg" alt="" />
<p><p>Of course, you may already get this at some level. You're smarter than to spend more than you make in a month.</p>
<p>But what if you bring home $5,000 per month and spend every last dollar of that $5,000? You're not spending more than you earn. Is that okay?</p>
<p>Well, not really.</p>
<p>Spending right at your means, even if you don't go over and spend more than you earn, is like trying to take a race car up to 200 miles an hour with a warped wheel.</p>
<p>If <em>anything </em>goes wrong &mdash; you hit a bump, you swerve, whatever &mdash; you're done. There's no second option when you're going full throttle in your financial life. There's no safety net.</p>
<p>If anything changes, your financial plan combusts.</p>
<p>The thing is, we <em>know</em> things will change. Everyone has to deal with unexpected expenses when things don't go as planned. But since we know something is going to happen&hellip; it's really not so unexpected, is it?</p>
<p>You need to plan for the unexpected, which means <a href="https://beyondyourhammock.com/specific-financial-goals/">you need savings to support you</a> during the times life doesn't go perfectly.</p></p>
<br/><br/><h3>My best piece of advice about money: live below (not just at) your means</h3>
<img src="https://static6.businessinsider.com/image/59247a7934911b1f008b5d4d-400-300/my-best-piece-of-advice-about-money-live-below-not-just-at-your-means.jpg" alt="" />
<p><p>If you're spending at your means, you're still spending too much money.</p>
<p>Imagine trying to build a sandcastle and your way of transporting the sand is a sieve.</p>
<p>You go over to scoop up the sand and carry it back to where you want to build your sandcastle, but by the time you get there all the sand is gone.</p>
<p>That's what happens when you live at your means. So the single best piece of financial advice I can give to someone in their 30s -- or anyone trying to build wealth -- is to not just live at your means, but to live as far below your means as you can.</p>
<p>Why? In order to reach financial freedom or any major financial goal, <a href="https://beyondyourhammock.com/save-money-living-boston/">you need to save money</a>.</p>
<p>Think about it. Are you going to work forever? If you're not, how will you pay for your life when you're not working? Where does that income come from?</p>
<p>One day, you'll stop working whether you want to <a href="https://www.marketwatch.com/story/heres-what-happens-when-someone-is-forced-to-retire-because-theyre-old-2016-10-27">or you're forced to stop</a> (via age, health, other factors). If you haven't built up another source of income, you'll suddenly have no money with which to fund your life.</p>
<p>This means you need to build your own income stream if you want to generate wealth beyond your paycheck. By saving and investing the money you <em>don't</em> spend, you start to build a surplus.</p>
<p>You can grow that pile of money into a new income stream which allows you to supplement or entirely replace your existing income stream (again, your existing income is probably your job).</p>
<p>It's just a fact: We all need money to live. You can get that through your job, large investment accounts that provide return, owning real estate, etc.</p>
<p>(If you want to develop an income stream from something like real estate or a business, then where does that initial investment come from? You have to save for it.)</p>
<p>No matter what you do, that income has to come in. Unless you're independently wealthy, you need to create your own assets that produce income.</p>
<p>For most of us, myself included, the only way to create the assets we need to reach the level of wealth we want is to break off a piece of your current income and save and invest it.</p>
<p>Which means you have to spend significantly less than the net income you make each month. In other words, live well below your means.</p></p>
<br/><br/><h3>Then, create a surplus in your cash flow and use it to grow wealth</h3>
<img src="https://static2.businessinsider.com/image/58360a0a8b987db706fc44e8-400-300/then-create-a-surplus-in-your-cash-flow-and-use-it-to-grow-wealth.jpg" alt="" />
<p><p>In order to actually follow this advice and make it work for you, you need to first define your real "means."</p>
<p>Here's how:</p>
<p>1. Set your savings rate.</p>
<p>2. Whatever is left over after you save money is what you have to spend.</p>
<p>It's that simple, but notice that savings comes first in this process. Determine how much you need to save or invest, put that money away, and <em>then</em> use what's left to spend on what you want.</p>
<p>A good baseline for your savings rate is 20%. If you really want to grow wealth or retire early, <a href="https://beyondyourhammock.com/savings-rate/">you need to save a minimum of 30%</a>&nbsp;to reach those kinds of financial goals.</p>
<p>You <em>can </em>save less than that, or spend more. But the direct impact is that you <em>will</em> work much longer than someone who saves and invests more.</p>
<p>If this feels like a struggle, reframe the conversation. You don't have to talk about reducing your spending and depriving yourself. Put it in terms of increasing your savings.</p>
<p>Ask yourself, do you want to be reliant on other people for your lifestyle? If the answer is no, then you have to create a self-sustaining system that supports the life you want to live &mdash; now <em>and</em> in the future.</p>
<p>You can start building that system by following a consistent saving and investing strategy. You can also rethink how you use your money.</p>
<p>Financial success isn't about never spending any money and becoming a cheap, miserly person who hoards every penny. Money is a tool and tools are meant to be used&hellip; effectively.</p>
<p>You should use your tools mindfully for best results. This isn't about not spending money or depriving yourself. It's about getting the most out of every dollar you spend.</p>
<p>Recognize what you value and use your money on that. Or, recognize when spending more doesn't actually give you a "more" experience.</p>
<p>I'll give you an example of what I mean by that. Imagine walking into a wine bar and asking for a recommendation for an easy-drinking red that is sure to please a crowd.</p>
<p>The employee gives you two bottles to choose from: A $25 cabernet and a $10 pinot noir.</p>
<p>Both bottles came with a positive recommendation and both are going to achieve your goals of being versatile and likely able to be enjoyed by a group. You're going to extract the same value and experience from the $10 bottle of wine that you would from the $25 bottle.</p>
<p>Buy the $10 bottle and move on.</p>
<p>You still used your money on something you wanted and you'll still get value out of it. But you also have more money in your pocket than if you had mindlessly chosen the pricier bottle because of whatever story you made up about what it means to "act" rich.</p>
<p>Now, think about making those same decisions on hotels, trips, even a home purchase. How much money can you actually save without impacting your life experiences? Sounds like a game that could set you up for financial success.</p>
<p><em>Eric Roberge&nbsp;is a certified financial planner and the founder of <a href="http://beyondyourhammock.com/">Beyond Your Hammock</a>.</em></p></p>
<br/><br/> https://www.businessinsider.com/best-money-advice-millennials-financial-planner-2017-11I'm a financial planner — here are the best 7 pieces of advice I can give you about money in your 30shttps://www.businessinsider.com/best-money-advice-millennials-financial-planner-2017-11
Mon, 13 Nov 2017 10:04:00 -0500Eric Roberge
<p>&nbsp;<img src="https://static6.businessinsider.com/image/5a0503b53dbef4ae078b5221-1333/eric roberge.jpeg" alt="Eric Roberge" data-mce-source="Eric Roberge" /></p>
<ul>
<li><strong>Many life transitions happen in your 30's, from moving up in your career to buying a home.</strong></li>
<li><strong>Making smart moves with your money during your 30's can help you achieve future financial success.</strong></li>
<li><strong>Eric Roberge, a certified financial planner and founder of <a href="http://beyondyourhammock.com/">Beyond Your Hammock</a>, shares his seven best piece of advice about money.</strong></li>
</ul>
<hr />
<p>&nbsp;</p>
<p>Life can get complicated when you hit 30. You might be in the middle of countless transitions, like moving up in your career, starting a business, buying a home, getting married, growing your family &mdash; and a whole lot more.</p>
<p>I help my clients with these transitions and other concerns on a daily basis, and the most important thing I&rsquo;ve learned is that life is complicated enough. Your money doesn&rsquo;t have to be equally as hard to figure out.</p>
<p>By focusing on a few key tenants, you can gain control of your finances. This is my best advice, pulled from both my professional background and real-world experience, to help you do more with your money (while stressing less about it).</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/financial-planner-richest-clients-ask-same-surprising-question-2017-11" >After 10 years as a financial planner, all of my richest clients still ask the same surprising question</a></strong></p>
<p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/save-more-retirement-mega-backdoor-roth-ira-strategy-2017-11" >I'm a financial planner — here's how I help clients save an extra $36,000 a year for retirement</a></strong></p>
<h3>1. Live well below your means</h3>
<img src="https://static4.businessinsider.com/image/5a0362bd35876e20008b4c17-400-300/1-live-well-below-your-means.jpg" alt="" />
<p><p>You've probably heard the advice to live below your means. This is a good place to start, but it's not enough if you want to grow real wealth.</p>
<p>If you earn $5,000 per month and spend $4,999 of it, technically, you <em>are </em>living below your means. You're not overspending in the sense that you're not spending more than you earn. As a result, you're probably not racking up debt and you're doing okay.</p>
<p>But "doing okay" and "being wealthy" are two very, very different things. If you're after the latter, then you need to live as far below your means as possible.</p>
<p>The bigger you can make the gap between what you earn and what you spend &mdash; meaning, your actual spending is far below the amount of money you take home each month &mdash; the faster you'll reach your financial goals (if you save and invest the surplus from your cash flow).</p>
<p>Which leads me to my next piece of advice that you should act on if you want to reach financial success.</p></p>
<br/><br/><h3>2. Focus on percentage of income saved, not the dollar amount</h3>
<img src="https://static3.businessinsider.com/image/5a01e2b44d05ac0b3b8b6f70-400-300/2-focus-on-percentage-of-income-saved-not-the-dollar-amount.jpg" alt="" />
<p><p>Let's say you earn $5,000 per month and you save and invest $1,500 of that money. That's a big chunk of your earnings and an impressive amount to put away every month.</p>
<p>But what happens when you start earning more money? What if you started earning $6,500 per month &mdash; but you didn't change how much you saved?</p>
<p>If you spent the extra instead, you became a victim of lifestyle creep, or lifestyle inflation. Lifestyle creep will kill your dreams of financial success faster than almost anything else.</p>
<p>Over the long term, it's not as much about the dollar amount you save, but the percentage of your income that you dedicate to saving and investing.</p>
<p>By focusing on percentages, you can ensure you're always saving more as you earn more. It&rsquo;s also great way to compare your savings habits to people at different income levels.</p></p>
<br/><br/><h3>3. Spend time tracking and reviewing your money</h3>
<img src="https://static3.businessinsider.com/image/59ce78bdc68d7b26008b5d57-400-300/3-spend-time-tracking-and-reviewing-your-money.jpg" alt="" />
<p><p>The biggest mistake I see people make with their money? Being reactive instead of proactive.</p>
<p>Most people spend their lives reacting to their finances. It's easy to just ignore your money as long as nothing is going seriously wrong. If you have enough to buy what you want, why worry?</p>
<p>The problem with that approach is that you rely on chance to have enough money in the bank when you actually need it &mdash; like when you want to travel, or buy a home, or quit your job, or retire.</p>
<p>Money tends to leave when we fail to pay attention to it.</p>
<p>Be intentional about your money and spend time reviewing and evaluating it. If you don't, you'll never know if you're moving in the right direction or not. It's like going on a hike without a compass.</p>
<p>Book time in your calendar every month to review your finances. When you take the time to look over all your spending, your accounts, and your net worth, it forces you to think about your actions. You can then become more mindful of your habits and behaviors.</p></p>
<br/><br/><h3>4. Don't just diversify your portfolio — diversify where you invest</h3>
<img src="https://static4.businessinsider.com/image/576c1bba52bcd026008cb440-400-300/4-dont-just-diversify-your-portfolio-diversify-where-you-invest.jpg" alt="" />
<p><p>You already get plenty of advice to save for retirement by funding your 401(k), IRA, or other employer-sponsored retirement plan. <em>Do </em>take advantage of these opportunities to save and invest for your future.</p>
<p>These are some of the easiest ways to make sure you'll have enough money to retire. But they're not the <em>only</em> way you should invest.</p>
<p>Retirement accounts weren't built for people to grow their wealth. Retirement accounts were built as forced savings vehicles so people could insure they'd have income down the road.</p>
<p>The government created tax-advantaged retirement accounts to incentivize people to save more money because not everyone gets enough from Social Security and pensions are pretty much dead.</p>
<p>Retirement accounts are a good thing &mdash; <em>for retirement</em>. Remember, you'll be penalized if you touch that money before a certain age. That could be decades away if you're in your 20s, 30s, or 40s.</p>
<p>I believe you should be able to live well today while still planning responsibly for that far-off future. That means using lots of other avenues for growing wealth. Diversify not just your portfolio within your 401(k), but also where you invest.</p>
<p>The right places to invest outside your retirement accounts will depend on your goals, but some options include taxable brokerage accounts, real estate (as in investment properties, not a single-family home that you live in), or creating additional types of income streams.</p></p>
<br/><br/><h3>5. Don’t spend more, spend better</h3>
<img src="https://static4.businessinsider.com/image/59b982cb9803c5b3308b5191-400-300/5-dont-spend-more-spend-better.jpg" alt="" />
<p><p>People often believe that with more money coming in, they can spend more. You're technically right about that &mdash; but where you may be going wrong is thinking that spending more provides more satisfaction and/or happiness.</p>
<p>The truth? Money doesn't provide those things&hellip; unless you focus on buying what you value.</p>
<p>Everyone has their own unique values. What works for me may not work for you (and vice versa). You run into financial trouble when decide that you should spend money just like everyone else.</p>
<p>When you see someone else get enjoyment out of an expensive trip to a tropical island, you spend on the same thing thinking it will provide you with the same level of happiness. It might.</p>
<p>But when we spend on what we think we "should" or on things just to impress or please others, more money and more spending usually just makes us miserable.</p>
<p>Stop and think about what you value. We're talking <em>core</em> values here; things like Community or Family or Growth or Learning.</p>
<p>The more you think through spending before it happens, the more intentional you can be with money. And the more you align your spending with what <em>you</em> value, the happier you'll be with what you purchase.</p></p>
<br/><br/><h3>6. Know when you need a financial planner (and when you don’t)</h3>
<img src="https://static5.businessinsider.com/image/55088ddc69beddb111092d74-400-300/6-know-when-you-need-a-financial-planner-and-when-you-dont.jpg" alt="" />
<p><p>If you're like most people, you might struggle to commit to going to the gym 4 or 5 times a week.</p>
<p>Even if you get there, you face the challenge of knowing exactly what exercises to do &mdash; and you may not push yourself as hard as you can truly go because it's really uncomfortable to make yourself work that hard!</p>
<p>You know how hard it can be to get up and get yourself to the gym for a good, hard, effective workout for just one day.</p>
<p>That doesn't even account for all the extra stuff you need to do before you can claim those six-pack abs, like getting your diet just right and making sure you balance your workouts with proper rest and recovery.</p>
<p>All of this can be said of your finances, too. It's tough to commit to doing the right thing over and over and over again. It's hard to know all the right moves to make all the time. It's exhausting to dedicate yourself to doing this consistently over time without fail.</p>
<p>A personal trainer can make the difference between success and failure with your fitness goals. A financial planner can make the difference between reaching or falling short with your financial goals.</p>
<p>A good financial planner and a good personal trainer will both:</p>
<p style="padding-left: 30px;">&bull; Take the time to listen so they can answer questions, address concerns, and understand your goals.</p>
<p style="padding-left: 30px;">&bull; Develop a customized plan to help you get from where you are to where you want to be.</p>
<p style="padding-left: 30px;">&bull; Give you peace of mind that you're doing the right thing to reach your goals once you start taking action.</p>
<p style="padding-left: 30px;">&bull; Provide guidance, education, and coaching as you need it.</p>
<p style="padding-left: 30px;">&bull; Hold you accountable to the actions you need to take to reach the goals you want to achieve.</p>
<p>A financial planner can add a lot of value and can help you build a greater amount of wealth than you could if you tried to do everything on your own.</p>
<p>That being said, not everyone needs a planner. Just as there are some people who are fully dedicated to their gym routine, you might be passionate about your finances and managing your money yourself.</p>
<p>If you're willing to put in the work and commit to the process of growing wealth on your own, go for it.</p>
<p>But if you think you could benefit from having someone provide guidance and act as a coach, sounding board, and confidant along the way, look for a fee-only financial planner willing to work as your fiduciary 100 percent of the time.</p></p>
<br/><br/><h3>7. The way to financial success is simple (so don't complicate it)</h3>
<img src="https://static4.businessinsider.com/image/595d397da3630f1d008b78a5-400-300/7-the-way-to-financial-success-is-simple-so-dont-complicate-it.jpg" alt="" />
<p><p>At the end of the day, my best advice comes down to this: keep it simple. There are a lot of professionals and companies out there who make personal finance and financial success sound really difficult and complex, but that's probably because they have a product they want to sell you to solve all your problems.</p>
<p>Financial success comes down to very small, simple actions that you take consistently over time. You don't build wealth overnight. It's a long-term process that requires some patience and discipline, which isn't always easy to find.</p>
<p>But the good news is that anyone can build wealth if they're willing to stick to some core best practices for money management:</p>
<p style="padding-left: 30px;">1. Focus on your habits. Be intentional with your spending and saving.</p>
<p style="padding-left: 30px;">2. Avoid get-rich-quick schemes. Building wealth happens over time, not in days or even months.</p>
<p style="padding-left: 30px;">3. Seek guidance from experts or people who have successfully grown wealth &mdash; not the guy by the water cooler at work who always has a hot stock pick you should buy.</p>
<p>Take these steps. Then rinse and repeat. If you can stick with the process over time, you'll put yourself in a better position to meet your financial goals and successfully grow your wealth.</p>
<p><em>Eric Roberge is a certified financial planner and the founder of <a href="http://beyondyourhammock.com/">Beyond Your Hammock</a>.&nbsp;</em></p></p>
<br/><br/> https://www.businessinsider.com/build-wealth-ask-yourself-question-2017-10Asking yourself a simple question before you spend, save, or buy anything can make a huge impact on your financeshttps://www.businessinsider.com/build-wealth-ask-yourself-question-2017-10
Fri, 03 Nov 2017 10:55:00 -0400J. Money
<p><img src="https://static4.businessinsider.com/image/59fc83214d05acb23f8b59b3-1003/wealthy people on phones.jpg" alt="Wealthy People on Phones" data-mce-source="Paul Hackett / Reuters" data-link="http://pictures.reuters.com/C.aspx?VP3=SearchResult&amp;VBID=2C04WNMI39FQ3&amp;SMLS=1&amp;RW=1919&amp;RH=818"/></p><p></p>
<p>Saw an interesting tip posed by my man Tom Corley the other day, author of <em>Rich Habits</em>.</p>
<p>He says this is the &#34;<a href="http://richhabits.net/question-need-ask/" target="_blank" rel="noopener noreferrer">only question you ever need to ask yourself</a>&#34; before making a move. Which is kinda drastic in my opinion, but hey – here I am blogging about it!</p>
<p>Here&#39;s the question:</p>
<h2>&#34;How will this move me forward?&#34;</h2>
<p>So simple, yet so profound! And something that could have served me well back in my college days too, haha… (does <em>moving forward</em> towards beer and girls count?! Maybe just 1/2 a point?)</p>
<p>Here are some times where Tom says it&#39;s smart to ask yourself this question:</p>
<ul>
<li>Before you turn on the TV</li>
<li>Before you click on Facebook</li>
<li>Before you cheat on your spouse</li>
<li>Before you gossip</li>
<li>Before you gamble</li>
<li>Before you light that cigarette</li>
<li>Before you feel like hitting someone</li>
</ul>
<p>(I like how cheating on your spouse is right up there with Facebook, haha… How about when you <em>use Facebook</em> to cheat?? Do you have to ask yourself twice? (womp womp))</p>
<p><strong>Anyways, a great question to think about for sure.</strong> And of course, it extends merrily to our finances and careers too. As much as we sometimes might prefer it didn&#39;t ;)</p>
<p>Here&#39;s a list I quickly put together on when you might want to ask yourself this question <em><strong>relating to your money</strong></em>… Will any of this help move you forward??</p>
<ul>
<li>When you take out your wallet</li>
<li>When you take out your credit card</li>
<li>When you step into the mall</li>
<li>When you log onto Amazon</li>
<li>When you take out a loan</li>
<li>When you stop reading Budgets Are Sexy (the horror!!)</li>
<li>When you opt out of your 401(k) contributions (double horror!)</li>
<li>When you quit your job with nothing lined up (unless you&#39;re doing it to read the <a href="https://www.budgetsaresexy.com/archives/" target="_blank" rel="noopener noreferrer">complete archives</a> of Budgets Are Sexy)</li>
</ul>
<p><strong>So as you can see, it&#39;s a pretty powerful question.</strong> You don&#39;t want to analyze yourself to death every second of the day, but I&#39;d imagine that even just asking yourself this *once* in a more general way each day could serve you and your wallet pretty well.</p>
<blockquote>
<p>&#34;How will <em>all my actions</em> today move me forward?&#34;</p>
</blockquote>
<p>Great question to have on your phone or computer&#39;s desktop screen too! Or even as a daily calendar reminder? Imagine seeing <em>this</em> pop up every time you open it up in the morning? Would be pretty hard to ignore!</p>
<p><strong>Check out <a href="http://richhabits.net/rich-habits-official-blog/" target="_blank" rel="noopener noreferrer">Tom&#39;s blog</a> or <a href="https://amzn.to/2zpr2qI" target="_blank" rel="noopener noreferrer">book</a> if you haven&#39;t done so before…</strong> he reminds me a little of a modern day Napoleon Hill, and is always putting out short and sweet passages that tend to get me to stop for a few and reflect… Great for *millionaire research* too, as he spent 5 years interviewing the wealthy (and the poor to compare better) which later turned into a book and catapulted him onto the scene.</p>
<p>Here are a few nuggets from his research which I&#39;m <a href="http://www.budgetsaresexy.com/why-im-obsessed-about-rich-habits/" target="_blank" rel="noopener noreferrer">pretty obsessed</a> about:</p>
<ul>
<li>6% of wealthy say what&#39;s on their mind vs. 69% for poor</li>
<li>79% of wealthy network 5 hours or more each month vs. 16% for poor</li>
<li>80% of wealthy are focused on accomplishing some single goal. Only 12% of the poor do this.</li>
<li>88% of wealthy read 30 minutes or more each day for education or career reasons vs 2% for poor</li>
<li>76% of wealthy exercise aerobically 4 days a week. 23% of poor do this.</li>
<li>67% of wealthy write down their goals vs. 17% for poor</li>
<li>44% of wealthy wake up 3 hours before work starts vs. 3% for poor.</li>
<li>6% of wealthy watch reality TV vs. 78% for poor.</li>
</ul>
<p>So yeah – lots of things to ponder!</p>
<p><em><strong>Now ask yourself: how will reading this blog post move you forward today? ;)</strong></em></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/financial-planner-questions-richest-clients-ask-2017-10" >I'm a financial planner — here are the 7 questions my richest clients ask</a></strong></p>
<p><strong>DON'T MISS:&nbsp;<a href="http://www.businessinsider.com/agrihoods-golf-communities-millennial-homebuyers-2017-10" >Rich millennials are ditching the golf communities of their parents for a new kind of neighborhood</a></strong></p>
<p><a href="https://www.businessinsider.com/build-wealth-ask-yourself-question-2017-10#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/tony-robbins-fiji-mansion-private-tour-luxury-resort-namale-2017-10">Tony Robbins takes us on a private tour of his massive beachfront mansion in Fiji</a></p> https://www.businessinsider.com/tips-save-more-money-spend-less-2017-11The only way to save money has always been the same — and you can't do it without making a key distinctionhttps://www.businessinsider.com/tips-save-more-money-spend-less-2017-11
Thu, 02 Nov 2017 12:06:40 -0400Holly Johnson
<p><img src="https://static2.businessinsider.com/image/59f9f6c958a0c19d378b4622-2400/rtr1mcia.jpg" alt="dinner" data-mce-source="Sergio Perez/Getty Images"/></p><p></p>
<ul>
<li><strong>The only way to save money is to spend less than you earn.</strong></li>
<li><strong>Knowing the difference between your &#34;wants&#34; and &#34;needs&#34; — you need to eat food, but you want to dine out with friends, for example — will keep you from overspending.</strong></li>
<li><strong>Tracking your spending can ultimately help you afford everything you want and need.</strong></li>
</ul>
<hr/>
<p> </p>
<p>While a bad economy or an especially low-paying job can make saving money infinitely harder, the formula for saving has always been the same. To save money, you need to spend less than you earn.</p>
<p>Obviously, this task becomes a lot easier when you earn more than average – or if you live in a low-cost area. If you have a six-figure income and live in Arkansas, for example, you should absolutely be socking some money away. On the flip side, someone living on the same salary in an expensive city like New York City, Boston, or San Francisco <a href="http://www.apartmenttherapy.com/10-metro-areas-where-100k-doesn-t-feel-like-a-lot-of-money-249469" target="_blank" rel="noopener noreferrer">might not have much if anything left over</a> after covering basic expenses like housing, food, and childcare.</p>
<p>But, no matter your income or where you live, you <em>have to</em> find a way to spend less than you earn if you hope to save money to retire, have some fun, and avoid debt. You can get a side hustle or a part-time job if you want, but if you don&#39;t spend less than you bring home, you&#39;re always going to struggle.</p>
<p>That&#39;s why it&#39;s important to determine the difference between your &#34;wants&#34; and &#34;needs&#34; — and to understand why that differentiation matters. Without a grasp on <a href="https://www.thesimpledollar.com/taking-a-deeper-look-at-wants-versus-needs/" target="_blank" rel="noopener noreferrer">why these terms matter</a>, it&#39;s significantly harder to get on the right side of your financial ledger.</p>
<h2><span id="wants-vs-needs">Wants vs. needs</span></h2>
<p>What is a &#34;want?&#34; And what is a &#34;need?&#34; While everyone&#39;s wants and needs can vary, there&#39;s a big difference between these two terms when it comes to how you spend your money.</p>
<p>Generally speaking, a &#34;need&#34; is something you absolutely cannot live without. You need a roof over your head, for example. You need food and health insurance and transportation to get to work.</p>
<p>You need electricity in your house, you need food to eat, and you need a telephone. In this day and age, you probably even need internet access for your job or so your kids can do homework.</p>
<p>A &#34;want,&#34; on the other hand, is something you&#39;d like, but could probably live without if push comes to shove. You want to go out to dinner tonight so you don&#39;t have to cook. You want a <a href="https://www.thesimpledollar.com/will-the-new-iphone-8-and-iphone-x-be-worth-the-investment-nope/" target="_blank" rel="noopener noreferrer">shiny new iPhone X</a>, even if your existing phone works just fine.</p>
<p>You want concert tickets and an annual beach vacation, but you wouldn&#39;t die if you couldn&#39;t have these things.</p>
<p>A want is something you very well may be able to afford, but don&#39;t actually <em>need</em> to get by.</p>
<h2><span id="when-needs-are-actually-wants">When needs are actually wants</span></h2>
<p>But, what happens when something you consider a need is actually a want? This happens all the time, and it really throws people off. Worse, it tricks people into justifying purchases they wouldn&#39;t make it they really thought it through.</p>
<p>For example, you need to eat, it&#39;s true. But, do you <em>need</em> to dine out at your favorite pub tonight? If you have food to eat at home, the answer is no. But if you&#39;re in the mood to justify the purchase, you could tell yourself you need to eat and do it anyway.</p>
<p>You also need a cellphone because it&#39;s 2017 and hardly anyone has just a landline anymore. But, you don&#39;t <em>need</em> to upgrade to the new $1,000 iPhone, and you may not even need a smartphone. Heck, you may not even need a data plan — but since you know you need a phone, you can convince yourself you need the best possible phone with the priciest talk, data, and text package money can buy.</p>
<p>New cars are another area where it&#39;s easy to confuse what you want with what you need. You may need a car to get to work. You probably <em>don&#39;t</em> need a brand-new car financed for 72 months with a $500 monthly payment. But, since you know you need to get to work, you can talk yourself into buying what you want on the premise that your shiny new ride is a need.</p>
<p>Well, guess what. It&#39;s not.</p>
<p>In all these instances, you absolutely need the item in question — food, phone, transportation — but you&#39;re choosing to spend more than you have to. In these cases, it&#39;s important to be honest with yourself about what you need, what you want, and the difference between the two.</p>
<h2>Three steps to help you separate wants from needs</h2>
<p>There&#39;s nothing wrong with spending money on wants. I would even argue that paying for wants is an important part of life. If life were only about working and paying bills, then it wouldn&#39;t be much fun.</p>
<p>The problem arises when people conflate their wants with their needs to the point where their spending stands in the way of their financial goals. When we spend money on wants without determining if they&#39;re really a priority, we often shortchange ourselves in the areas of our lives that really matter – things like saving money for college, emergencies, retirement savings, and vacations.</p>
<p>If you&#39;re struggling to separate wants from needs, here are three steps to help.</p>
<h2><span id="step-1-decide-which-wants-truly-add-value-to-your-life">Step 1: Decide which wants truly add value to your life.</span></h2>
<p>If you&#39;re spending more than you should and having trouble separating wants from needs, it&#39;s smart to take a step back and look at what you&#39;re actually buying. Do your wants add real value to your life, or are they <a href="https://www.thesimpledollar.com/nine-strategies-for-cutting-the-cost-of-convenience/">made out of convenience</a>? Are you making discretionary purchases because they&#39;re important to you, or simply out of habit?</p>
<p>While spending on wants is an important part of life, some wants are more important to us than others – and if you stop to examine your spending, you may find that many of the splurges you&#39;re making aren&#39;t really worth it. By deciding which wants add real value to your life, you can determine which ones to keep and which wants you can live without.</p>
<h2><span id="step-2-trade-away-some-of-your-wants-for-a-better-deal">Step 2: Trade away some of your wants for a better deal.</span></h2>
<p>Depending on the &#34;want&#34; in question, you may be able to come up with an alternative action that lets you save your money instead. This is a good strategy to try when you&#39;re spending on something out of habit or out of convenience.</p>
<p>For example:</p>
<ul>
<li><strong>If you dine out a few times per week</strong> more out of convenience than pleasure, you may find you can cut your spending and still eat conveniently with some simple planning. If you can get in the habit of meal planning or using your crock pot to make easy dinners a few nights per week, for example, you may be able to avoid hasty, unfulfilling dinners out and pocket that money instead.</li>
<li><strong>If you have an expensive cable package </strong>out of habit but never watch all the channels, you may be able to choose a cheaper package and save money without really noticing. Heck, you may even be able to <a href="https://www.thesimpledollar.com/how-to-cut-the-cable-or-satellite-cord-and-save-a-lot-of-money-each-month/" target="_blank" rel="noopener noreferrer">cancel your cable subscription</a> together.</li>
<li><strong>If you&#39;re signed up for multiple subscriptions </strong>for magazines or any of those <a href="https://www.thesimpledollar.com/some-thoughts-on-subscription-crates-and-monthly-delivery-clubs/">subscription boxes</a> like FabFitFun but you rarely have time to enjoy what you receive, you might be able to cancel without any real impact to your happiness or fulfillment.</li>
</ul>
<p>It&#39;s important to have wants in your life, but you should only splurge when you&#39;re truly benefiting. If a want isn&#39;t really making you happy, you&#39;ll get more out of your hard-earned dollars once you cut the fat and reallocate those dollars to make them count.</p>
<h2><span id="step-3-figure-out-how-to-afford-what-you-really-want">Step 3: Figure out how to afford what you really want.</span></h2>
<p>Let&#39;s say you have a handful of wants that are really important to you. You love having a new car because you drive an hour to work each way, or you&#39;re a huge tech geek who can&#39;t wait to get your hands on every new phone or game console that comes out. Maybe you&#39;re a foodie who loves dining out so much you&#39;re willing to sacrifice elsewhere to be able to try all your favorite restaurants.</p>
<p>Working those wants into your budget is obviously important, but you need to make sure you can afford it. If you&#39;re not saving money already – or if you&#39;re spending all you earn and going into debt – then you probably need to <a href="https://www.thesimpledollar.com/money-management-101-why-you-should-track-your-spending/">analyze your spending</a> in its entirety to find other places to cut.</p>
<p>The best way to determine whether you can afford everything you want – in addition to everything you <em>need</em>, of course – is to use a monthly budget and track your spending. While tracking your purchases can prevent you from spending more than you want, a monthly budget can help you prioritize your monthly obligations and your wants without sacrificing your savings goals.</p>
<p>My favorite type of budget is the <a href="https://www.thesimpledollar.com/how-and-why-to-use-a-zero-sum-budget/" target="_blank" rel="noopener noreferrer">zero-sum budget</a> because all it takes is a pen and paper to get started. Zero-sum budgeting also makes prioritizing easy since it forces you to &#34;spend&#34; all your money on paper and &#34;give each dollar a job.&#34;</p>
<p>In addition, zero-sum budgeting forces you to <a href="https://www.thesimpledollar.com/the-magic-math-of-paying-yourself-first/">pay your savings and investments</a> as if they were regular bills, then learn to live off the rest. In that sense, it may force you to reevaluate your wants and needs since you&#39;ll have less discretionary money over all.</p>
<h2><span id="the-bottom-line">The bottom line</span></h2>
<p>If you&#39;re struggling with money and can&#39;t <a href="https://www.thesimpledollar.com/nine-strategies-for-improving-your-income-in-the-coming-year/">earn more of it</a> right now, your best step is maximizing the money you have. Very often, the best way to do this is to take a close look at your monthly spending to see how much you&#39;re splurging. From there, you can decide if those &#34;wants&#34; are truly worth it, or if you&#39;d be better off taking a different approach.</p>
<p>At the end of the day, the best way to make sure you can afford what you want is to think ahead, be intentional with your spending, and most importantly, be honest with yourself. We all want things in life, but those who get the most of what they want are the ones who plan.</p>
<p><em>Holly Johnson is an award-winning personal finance writer and the author of <a href="https://www.amazon.com/Zero-Down-Your-Debt-Reclaim/dp/1633534790/ref=sr_1_1?ie=UTF8&amp;qid=1481201603&amp;sr=8-1&amp;keywords=zero+down+your+debt" target="_blank" rel="noopener noreferrer"><strong>Zero Down Your Debt</strong></a>. Johnson shares her obsession with frugality, budgeting, and travel at <a href="https://www.clubthrifty.com/" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?hl=en&amp;q=http://ClubThrifty.com&amp;source=gmail&amp;ust=1473262467084000&amp;usg=AFQjCNHkZ2irIit2_4tcF7_eNpPHWsA2AA"><strong>ClubThrifty.com</strong></a>.</em></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/benefits-of-roth-401k-2017-6" >Harvard researchers say you'll have more money in retirement if you choose the right savings account</a></strong></p>
<p><strong>DON'T MISS:&nbsp;<a href="http://www.businessinsider.com/personal-finance-myths-debunked-2017-4" >7 things people think are terrible for their finances that actually aren't</a></strong></p>
<p><a href="https://www.businessinsider.com/tips-save-more-money-spend-less-2017-11#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/gary-shilling-legendary-economist-trade-war-outlook-says-us-will-win-2018-10">WATCH: The legendary economist who predicted the housing crisis says the US will win the trade war</a></p> https://www.businessinsider.com/status-anxiety-high-earners-savings-crisis-2017-10High earners have 'status anxiety' — and it's leading to a savings crisis in Americahttps://www.businessinsider.com/status-anxiety-high-earners-savings-crisis-2017-10
Sun, 29 Oct 2017 10:00:00 -0400Drake Baer
<p><strong><img src="https://static5.businessinsider.com/image/595aa62cd084cc1d008b7409-816/gettyimages-800774450.jpg" alt="Hamptons party" data-mce-source="Mark Sagliocco/Getty Images for Hamptons Magazine" /></strong></p>
<ul>
<li><strong>Saving money isn't just about earning enough, it's about understanding the psychological reasons people often struggle with saving.&nbsp;</strong></li>
<li><strong>High-earners are expected to project a certain lifestyle, which can make it difficult to save.&nbsp;</strong></li>
<li><strong>Many people avoiding thinking about money because it's uncomfortable, but changing that pattern could be the key to improving your financial situation.&nbsp;</strong></li>
</ul>
<hr />
<p>&nbsp;</p>
<p>Among the many discords raging in Washington right now, the one that makes us want to pull out our hair the most is <a href="https://www.nytimes.com/2017/10/23/us/politics/trump-401-k-tax-budget.html?_r=0">the proposal</a> to drastically lower the cap on annual 401(k) contributions, from $18,000 annually for people under 50 years old to $2,400. Even Donald Trump himself has come out <a href="https://twitter.com/realDonaldTrump/status/922428118685581313?ref_src=twsrc%5Etfw&amp;ref_url=https%3A%2F%2Fwww.nytimes.com%2F2017%2F10%2F23%2Fus%2Fpolitics%2Ftrump-401-k-tax-budget.html">against</a> the plan.</p>
<p>It also highlights, once again, America&rsquo;s dysfunctional relationship with personal finance, which is hard for even for people who are paid well. In <a href="https://www.bloomberg.com/news/articles/2016-09-20/make-six-figures-there-s-a-decent-chance-you-ve-got-almost-nothing-in-the-bank">a survey of more than 7,000 high earners</a> from last year, almost half of respondents making between $100,000 and $149,999 had under $1,000 in their savings accounts. That&rsquo;s because, as Megan Ford, the current president of the Financial Therapy Association, <a href="http://nymag.com/scienceofus/2016/09/why-people-earning-6-figures-barely-have-anything-saved.html">once explained to me</a>, saving isn&rsquo;t just about earning. If you want to squirrel away funds, you need to know the psychological reasons people often have with making it happen.</p>
<h2><strong>Look out for your own status anxiety.</strong></h2>
<p>Signaling status is a great way to make sure you don&rsquo;t save anything. In the U.S., Ford said, it&rsquo;s expected that if you start earning more, your lifestyle should swell right along with it. &ldquo;It&rsquo;s a broader overladen exception of the challenge of keeping up with those around us and having this projection of &lsquo;Look at how great I&rsquo;m doing,&rsquo;&rdquo; she said. If you&rsquo;re doing it for the &lsquo;gram, you&rsquo;re probably not doing it for your bank account. (Protip: Alain De Botton&rsquo;s <a href="https://www.amazon.com/Status-Anxiety-Alain-Botton/dp/0375725350"><em>Status Anxiety</em></a> is a super accessible inquiry into how status came to run so much of our lives, and does wonders for that feeling of &ldquo;am I keeping up?&rdquo;)</p>
<h2><strong>Start avoiding avoidance.</strong></h2>
<p>Money is still such a taboo that lots of people feel uncomfortable talking about it, even in the most intimate of relationships. Ford sees it in her therapy practice. &ldquo;I&rsquo;m always surprised by how little couples know, even right before entering into marriage<strong>, </strong>Ford said. &ldquo;&rdquo;they don&rsquo;t even know how much the other makes as their annual salary just a couple months before their wedding date.&rdquo; If you <em>don&rsquo;t</em> talk about money with your partner, it&rsquo;s going to be hard to figure it out together.</p>
<p>That reluctance isn&rsquo;t just a disruptor between people, but within people. Psychologists call the all-too-human tendency to resist thinking about things that make you uncomfortable <a href="https://www.psychologytoday.com/blog/in-practice/201305/avoidance-coping">&ldquo;avoidance coping&rdquo;</a>. As with other life skills that school tends to gloss over, we might avoid the money side of life because it&rsquo;s embarrassing to not know what to do about it, especially if you&rsquo;re successful at work. &ldquo;Our society doesn&rsquo;t do a good job of educating us about finances and financial management,&rdquo; Ford said, so unless you learn from a friend or family, it&rsquo;s hard to get the chance to acquire that skill. Some people &ldquo;don&rsquo;t know where they should start or where to get started, and when you lack that financial literacy, psychologically you tend to avoid it,&rdquo; she added. &ldquo;If you don&rsquo;t have a solid plan or someone helping out, you just end up letting it pass you you by.&rdquo;</p>
<p>Naming these problems also helps with finding their solutions. if you&rsquo;re lucky enough to have a friend who&rsquo;s passionate or knowledgeable about personal finance, ask them to talk through money questions with you, since it can defang the shame. Also, by setting up an automatic recurring deposit, you don&rsquo;t even have to actively think about making a decision in order to make the right financial decision. That&rsquo;s the brilliance of the retirement program that Republicans are so confoundingly trying to cap: 401(k) funds are automatically shepherded out of our paycheck, before you have the chance to spend them.</p><p><strong>&nbsp;<a href="https://www.thriveglobal.com/stories/15837-why-the-cure-for-loneliness-may-be-caring-for-other-people" >Why The Cure For Loneliness May Be Caring For Other People</a></strong></p>
<p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/salary-afford-most-expensive-zip-codes-2017-6" >Here's how much you need to earn to comfortably afford a home in the 25 most expensive ZIP codes in America</a></strong></p>
<p><a href="https://www.businessinsider.com/status-anxiety-high-earners-savings-crisis-2017-10#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/former-ford-family-estate-hamptons-market-poential-record-sale-75-million-2017-8">A massive Hamptons estate that once belonged to the Ford family is on the market for a potentially record-breaking $175 million</a></p> https://www.businessinsider.com/15-things-you-can-do-today-to-build-wealth-in-the-future-2017-1015 things you can do today to become rich in the futurehttps://www.businessinsider.com/15-things-you-can-do-today-to-build-wealth-in-the-future-2017-10
Mon, 23 Oct 2017 12:58:00 -0400Benjamin P. Hardy
<p><img src="https://static3.businessinsider.com/image/595faea1d9fccd1c008b4a4f-970/gettyimages-699356110.jpg" alt="wealthy man reading" data-mce-source="Mike Hewitt/Getty" /></p><p></p>
<p><em>"The greatest reward in becoming a millionaire is not the amount of money that you earn. It is the kind of person that you have to become to become a millionaire." &mdash; Jim Rohn</em></p>
<p>Most people wish their circumstances would magically change for them. They don't have the desire to become better themselves so they can proactively improve their own circumstances.</p>
<p>Unlike most people, who simply wait and wish for luck, you can seek to become the kind of person equipped with the skills and abilities to do brilliant things.</p>
<p>You can become the kind of person who does highly influential work. Your work can solve pressing problems, improve people's lives, and get noticed by important people who share your work not for your sake, but for theirs! Sharing your work makes them look good because of how great it is.</p>
<p>The quality of who you are as a person, and the work you do, is completely within your control. But you can't wish for it to happen. You must become the kind of person who naturally attracts the success you seek.</p>
<p>Here's how:</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/how-to-become-a-millionaire-by-30-2016-2" >9 things to do in your 20s to become a millionaire by 30</a></strong></p>
<h3>1. Invest at least 10% of your income in yourself</h3>
<img src="https://static4.businessinsider.com/image/57e3f76bb0ef97f0288b7384-400-300/1-invest-at-least-10-of-your-income-in-yourself.jpg" alt="" />
<p><p>If you don't pay for something, you rarely pay attention.</p>
<p>Most people want stuff that's free. But if you get something for free, you rarely prize that thing. You rarely take it seriously.</p>
<p>How much do you invest in yourself?</p>
<p>How committed are you to yourself?</p>
<p>If you aren't investing in yourself, than you don't have any skin in the game of your own life.</p>
<p>If you aren't invested in your business, you probably won't do high quality work.</p>
<p>If you're not invested in your relationships, you're probably more focused on what you can get than what you can give.</p>
<p>When it comes to self-improvement, investing 10% of your income on yourself will yield a 100X or more return on that investment. For every dollar you spend on your education, skills, and relationships, you'll get at least 100 dollars back in returns.</p>
<p>If you want to do something extremely well, you need to surround yourself with the right mentors. Anything that you'll ever do well will be the result of high quality mentoring. If you suck at something, it's because you haven't received quality mentoring in that thing.</p>
<p>The best mentorships are the ones where you pay your mentor. Often, the more you pay the better, because you'll take the relationship far more seriously. You won't solely be taking in that relationship. You won't purely be a consumer. Instead, you'll be invested, and as such, you'll listen more carefully. You'll care more. You'll be more thoughtful and engaged. There will be higher consequences for not succeeding.</p>
<p>I invested $3,000 to get help writing my first book proposal from a highly successful writer. That $3,000 got me maybe 4 or 5 hours of his time. But in those 4 or 5 hours, he taught me what I needed to know to create an amazing book proposal. He provided me resources that dramatically enhanced and sped up my process. With his help, I was able to get a literary agent and eventually a multi six figure book contract.</p>
<p>Had I been overly concerned about the $3,000, I'm confident that to this day, I'd still not have written a book proposal. At the very most, I'd have written a terrible one. I would not have been as motivated or invested, so I would have been far more likely to procrastinate needed action.</p>
<p>If you don't have much money, surely you can afford to buy a book. How much money and time do you spend on entertainment, clothes, or food? It's a matter of priority.</p>
<p>It's only when you invest in something that you have the motivation to make it happen.</p>
<p>Beyond mentorships, you should invest in education programs such as online courses, books, quality products such as food and sleep.</p>
<p>Your level of success can generally be directly measured by your level of investment. If you're not getting the results you want, it's because you haven't invested enough to get those results.</p>
<p>Your number 1 investment must be yourself.</p>
<p>Who you are determines:</p>
<p style="padding-left: 30px;">&bull; the quality of marriage you'll have</p>
<p style="padding-left: 30px;">&bull; the quality of parent you become</p>
<p style="padding-left: 30px;">&bull; the quality of work you produce</p>
<p style="padding-left: 30px;">&bull; the level of happiness you have</p>
<p>Here's what you'll find when you financially invest yourself in something. You become very committed to that thing. Economists call this sunk cost bias. But you can leverage this to your benefit. If you want to escalate your personal commitment to something, invest heavily in that thing.</p>
<p>Eventually, it will become a point of no return.</p>
<p>You'll become so fiercely committed that withdrawing will seem ridiculous.</p>
<p>Hence, you'll need to truly know WHAT you want and WHY (see #14 below). If you don't know these things, then over-committing could be a huge and irrational problem.</p>
<p>However, if you are certain about WHO you are/want to be, WHAT you want, and WHY, then you need to invest yourself.</p></p>
<br/><br/><h3>2. Invest at least 80% of your "off" time into learning</h3>
<img src="https://static1.businessinsider.com/image/59a051686eac4020008b4d7e-400-300/2-invest-at-least-80-of-your-off-time-into-learning.jpg" alt="" />
<p><p>Most people are consumers rather than creators.</p>
<p>They are at work to get their paycheck, not to make a difference.</p>
<p>When left to their own devices, most people consume their time as well. It is only by investing your time that you get a return on that time.</p>
<p>Nearly every second spent on social media is consumed time. You can't have that time back. Rather than making your future better, it actually made your future worse. Just like eating bad food, every consumed moment leaves you worse off. Every invested moment leaves you better off.</p>
<p>Entertainment is all well and good. But only when that entertainment is an investment in your relationships or yourself. You'll know if it was an investment if that entertainment continues to yield returns over and over in your future. That may include positive memories, transformational learning, or deepened relationships.</p>
<p>Even still, life isn't purely about being entertained. Education and learning is also key. And although both are essential, education will provide far greater returns in your future.</p>
<p>The world's most successful people are intense learners. They are hard readers. They know that what they know determines how well they see the world. They know that what they know determines the quality of relationships they can have and the quality of work they can do.</p>
<p>If you are constantly consuming junk media, how can you possibly expect to create high value work? Your input directly translates to your output. Garbage in, garbage out.</p></p>
<br/><br/><h3>3. Don't work for money, work to learn</h3>
<img src="https://static1.businessinsider.com/image/5970efea552be551008b5828-400-300/3-dont-work-for-money-work-to-learn.jpg" alt="" />
<p><p><em>"When you are young, work to learn, not to earn." &mdash; Robert Kiyosaki</em></p>
<p>Just as a large majority of your down-time should be spent learning, so should a great deal of your "working" time.</p>
<p>Wealthy and happy people work to learn. Unsuccessful and unhappy people work primarily for money.</p>
<p>Only 20% of your energy should be spent doing your actual work. The rest should be spent learning, improving yourself, and resting.</p>
<p>It is by "sharpening your saw" that you'll continue to become a better and more capable person. Thus, as you dedicate large portions of time becoming a better thinker, communicator, and better at your craft, the quality of your work will continue to increase. Eventually, you'll be able to charge VERY VERY high fees for your work, because no one else can do it like you.</p>
<p>When you prioritize learning and recovery, then during the hours you are actually working, you'll be in a deep flow state. You won't be distracted like most people are when they work. You're either 100% on or 100% off. While working, you can get more done in a few hours than most people get done in a number of days.</p>
<p>Your time is spent well because your priorities are clear, you're well-rested, and your mind is stimulated.</p></p>
<br/><br/><h3>4. Don't learn for entertainment, learn to create more value</h3>
<img src="https://static3.businessinsider.com/image/59e4d0fa1f848920008b5c34-400-300/4-dont-learn-for-entertainment-learn-to-create-more-value.jpg" alt="" />
<p><p><em>"The key secret to success is not excessive expertise, but the ability to use it. Knowledge is worthless unless it is applied." &mdash; Max Lukominskyi</em></p>
<p>In our media and information age, there are a million things you could learn.But if you don't put that learning into immediate practice, it becomes shallow information.</p>
<p>Information and knowledge are two very different things.</p>
<p>Knowledge and wisdom are also two very different things.</p>
<p>It takes wisdom to determine what you should learn, why you should learn it, and when you should learn it.</p>
<p>Unless you're invested, you probably won't learn with the intensity needed to maximize that knowledge.</p>
<p>Unless you understand the value of your time, you probably won't have the discernment to ignore almost everything while learning that which will bring the highest return.</p>
<p>When you learn something, you should get a return on that learning. Far too many people read books now just to say they've read lots of books. If you're not applying what you're learning, your consuming and wasting your time.</p></p>
<br/><br/><h3>5. Invest at least 10% of your income into vehicles that will generate more money</h3>
<img src="https://static2.businessinsider.com/image/59a99df279bbfd22008b7837-400-300/5-invest-at-least-10-of-your-income-into-vehicles-that-will-generate-more-money.jpg" alt="" />
<p><p>Very few people create true wealth.</p>
<p>Even those who have high incomes are not truly wealthy. Most people's lifestyles match their incomes. When they make more, they consume more. In fact, most people make money solely to consume.</p>
<p>Very few people make money to invest that money.</p>
<p>It's best to think of your business as only 1/2 of your income equation. You have your business which brings income. Then, you have your investment entity to turn your income into even more money.</p>
<p>Like anything, how well you manage your money is determined by how well mentored you are. If you want to become brilliant with money, invest in education and mentoring.</p>
<p>The best time to plant a tree was 20 years ago. The best time to start investing was also in the past. If you haven't started yet, don't sit and wallow in regret.Tomorrow doesn't exist for people who don't do something today.</p>
<p>Start today. Get yourself educated. Create a vehicle, or several vehicles, where you put at least 10% of your income. Eventually, your investment vehicle may even start producing more profits for you than your actual business.</p>
<p>Compound interest is a real thing. If you put 10% of your income into your investments over a long enough period of time, you'll be set. Unlike the majority of high earners out there, you'll be able to STOP WORKING whenever you want, because your money is making more than enough money for you to comfortably live with.</p></p>
<br/><br/><h3>6. Shift your motivation from getting to giving</h3>
<img src="https://static1.businessinsider.com/image/59e4d405d4e9202d008b5aac-400-300/6-shift-your-motivation-from-getting-to-giving.jpg" alt="" />
<p><p><em>"The world gives to the givers and takes from the takers." &mdash; Joe Polish</em></p>
<p>Most people are only focused on what they can get out of life.</p>
<p>Me, me, me.</p>
<p>However, once you become more consciously awake to the world, your desire will shift from merely receiving to giving.</p>
<p>You'll realize that it's actually far more satisfying to give than to get. Moreover, you'll be driven by a cause you fully believe in.</p>
<p>The truth is, you really only have 1 of 2 orientations towards people (and life).</p>
<p>Either you are in relationships as TRANSACTIONS, or as TRANSFORMATIONS.</p>
<p>Most people have transactional relationships. They're focused only on what they get out of the relationship. It's all about furthering their own agenda. It's rooted in scarcity. It's selfish.</p>
<p>This isn't how you get far in relationships and life.</p>
<p>It's also how you get stuck in your own small-mindedness.</p>
<p>Transformational relationships, on the other hand, are completely focused on giving and gratitude &mdash; the hallmarks of abundance. In these relationships, the whole becomes more than the sum of parts. Both parties, in vulnerability and trust, transcend their own small-mindedness and become something more.</p>
<p>At the core, this requires being a giver, not a taker. As Adam Grant has explained in his book, Give and Take, when two givers come together, the results are astronomical.</p>
<p>Here's a pro-tip: don't surround yourself with takers.</p>
<p>When your motivation is to give, you'll often get insights about how you can improve your relationships. Random thoughts will pop into you head to send "Thank you" texts to various people.</p>
<p>You'll have more ideas about how you can improve other people's lives and businesses.</p>
<p>You'll start contributing more, which will lead to far more opportunities and deeper relationships. People will come to love and trust you. Your work will be motivated by a higher cause and thus will be far more inspired and impactful.</p></p>
<br/><br/><h3>7. Openly acknowledge how dependent you are on other people</h3>
<img src="https://static3.businessinsider.com/image/59e4d4841f84891f008b5dc6-400-300/7-openly-acknowledge-how-dependent-you-are-on-other-people.jpg" alt="" />
<p><p>&nbsp;Just because your primary motivation is to give, doesn't mean you don't also seek a lot of help.</p>
<p>Actually, you are constantly seeking and receiving help.</p>
<p>The truth is, everyone is highly dependent on other people to do what they do. But it takes wisdom and humility to openly acknowledge that dependence. Rather than seeing it as a weakness, realize that it's a strength.</p>
<p>Beyond acknowledging your dependence, constantly express your appreciation to the people in your life. That which you appreciate, appreciates. Relationships are assets that can and should grow bigger and better over time.</p>
<p>If you don't appreciate and give to your relationships, your relationships will suffer. All relationships are like bank accounts, and if one person is constantly depositing and the other person is constantly withdrawing, eventually all of the resources become depleted.</p>
<p>In such relationships, 1+1=less than 2.</p>
<p>Conversely, in synergistic and healthy relationships, 1+1=far more than 2. When two people are continually giving and receiving, the relational bank account continues to grow and expand, providing several intended and unintended benefits.</p>
<p>For example, I was recently at the gym with my brother. At the beginning of the workout, he was struggling mentally. He wasn't adding to my energy and helping my workout become better than if I was alone, but instead, he was sucking my energy and requiring me to exert more energy and effort than if I was alone.</p>
<p>I made him aware of what was happening, and he immediately shifted his emotional posture. He realized how dramatically his mood was impacting me.His motivation shifted from consuming an experience to creating something great.</p>
<p>Our shared mental state heightened, taking us into group flow. Our workout become far superior to anything I could create on my own. Not only that, but we began to engage in inspired conversation. This led to brilliant insights and connections that were relevant to the book I'm writing.</p>
<p>The amazing workout was the intended outcome of our synergy. The insights for my book were unintended benefits. This can only happen when both parties are actively giving and receiving from the relationship. Where both are focusing on creating rather than consuming. Where both have the primary motivation of helping the other person succeed.</p></p>
<br/><br/><h3>8. Create win-win strategic partnership to achieve 10x or 100x goals</h3>
<img src="https://static4.businessinsider.com/image/5575f7abecad0445289e9d36-400-300/8-create-win-win-strategic-partnership-to-achieve-10x-or-100x-goals.jpg" alt="" />
<p><p><em>&nbsp;"All failed companies are the same: they failed to escape competition." &mdash; Peter Thiel</em></p>
<p>Most people are in a state of competition rather than collaboration.</p>
<p>Collaboration is a much higher level than competition.</p>
<p>Competition is focused on the self. It's also very low level thinking, because what you can do on your own is very limited.</p>
<p>People who are competing are grinding. They're more focused on winning than creating real solutions.</p>
<p>However, when your thinking becomes expanded, you realize you could do so much more with other people. Collaboration creates unique connections working by yourself never could.</p>
<p>You have skills and knowledge that are awesome in your field. There are other people in different fields who have skills and knowledge completely outside of your current awareness. These people also have assets you don't have.</p>
<p>If you want to get 10X or 100X the results of other people in your field, you need to develop strategic "win-win" partnerships. This generally happens when you devise a plan where your skill sets and assets merge with the skill sets and assets of someone else.</p>
<p>What you can do well, someone else may struggle with. What you struggle with, others can do extremely well.</p>
<p>Who can you partner with that could speed your process?</p>
<p>Who has assets and resources you don't?</p>
<p>How could you help these people?</p>
<p>What types of partnerships could you develop, that would allow you to more quickly achieve your goals and help them more quickly achieve theirs?</p>
<p>When you collaborate with other people, 1+1=more than 2. The whole becomes DIFFERENT from the sum of it's parts.</p>
<p>This is how TRANSFORMATION occurs. Only those who engage in collaboration actually experience true transformation. People who only work well by themselves are stuck in their own narrow worldview and agendas.</p>
<p>When you merge with others, your ideas and goals change. They become bigger and better. They become DIFFERENT from what you could ever create on your own.</p>
<p>The only way to have these types of partnerships is to think long-term. You must be invested and have skin in the game. It can't be transactional. It's can't be this for that. It must be about something a lot deeper. When it is, you'll have far more integrity in the work you do. You'll express greater appreciation. You'll consistently do the right thing, even if that right thing is difficult and uncomfortable.</p>
<p>Don't seek transactional relationships. Only seek long-term TRANSFORMATIONAL relationships.</p></p>
<br/><br/><h3>9. Set 10X goals and face your fears</h3>
<img src="https://static3.businessinsider.com/image/58af6333549057dc008b67ab-400-300/9-set-10x-goals-and-face-your-fears.jpg" alt="" />
<p><p>Look at your current goals.</p>
<p>Why is that your metric for "success"?</p>
<p>Why is that your target?</p>
<p>What would happen if, in all seriousness, you 10X'd that target?</p>
<p>What if rather than earning $3,000/month, you pursued $30,000/month?</p>
<p>Is that even possible?</p>
<p>Of course it's possible. There's several people doing it.</p>
<p>The only difference between them and you is their education, relationships, and strategy.</p>
<p>When you set a 10X goal, you're required to think very differently about your daily behaviors. You're required to be more serious in all aspects of your life. You're required to eliminate limiting thinking and consumptive distractions.</p>
<p>Setting a 10X goal will be one of the best things you've ever done for yourself. This goal should be created while you are in a peak state. You get into a peak state by doing something powerful, whether that be exercising, learning, or being in a unique environment, such as a foreign country. You can even get into a peak state by being around certain types of people, the ones who inspire you to be the best version of yourself.</p>
<p>Only you know what gets you into a peak and passionate state. So, do whatever it is that gets you there, and then write down your goals. Declare what you're going to do. Then write that goal down and visualize it's achievement every single day until it becomes your reality.</p>
<p>When you think about this goal, don't deviate from the natural flow of ideas that follow.</p>
<p>You can't 10X your results by engaging in the same thinking and behaviors you're currently performing. Consequently, while thinking about your goal, you'll also get ideas about what you need to do, realistically, to achieve that goal.</p>
<p>Chances are, you don't know what you don't know. So you'll need to start really educating yourself about how you could conceivably achieve your goal. You'll need to get bolder about the work you're doing. You'll need to create more, and fail more. Over and over, in fact. Quantity is often the fastest path to quality.</p>
<p>Not only that, but when you think about your 10X goal, you'll probably have ideas that scare you. When you do work that scares you, you cross a boundary that most people never cross. Scary work is often highly profitable and valuable work.</p></p>
<br/><br/><h3>10. Get really really good at marketing</h3>
<img src="https://static2.businessinsider.com/image/57bc67c9db5ce94f008b8561-400-300/10-get-really-really-good-at-marketing.jpg" alt="" />
<p><p>Marketing is nothing more than applied psychology.</p>
<p>It's about connecting with people, persuading them, and helping them.</p>
<p>Many people think marketing is a nasty or immoral thing.</p>
<p>Many "artists" don't learn marketing because they don't want to "sell out." They want their work to be pure.</p>
<p>Academics are not better. Their work is not accessible to the common man.</p>
<p>Marketing is nothing more than making your work easier and better to find and use.</p>
<p>People aren't magically going to appear and buy your stuff.</p>
<p>People aren't going to magically appear and read your stuff.</p>
<p>Even right now: How did you land on this page? Look at the title of this article. I could have just as easily called it, "Advice for becoming successful."</p>
<p>But would you have clicked on that article?</p>
<p>Probably not.</p>
<p>But you clicked on this one.</p>
<p>Why did you click on this one?</p>
<p>How did you get this far down?</p>
<p>Think about the experience.</p>
<p>Marketing is the "HOW" to whatever it is you do.</p>
<p>The reason most people aren't successful is because they either fear or avoid marketing. For the same reason, most people are bad teachers. They're more focused on content than the delivery and design of that content.</p>
<p>But the delivery &mdash; the HOW &mdash; is just as important IF NOT MORE IMPORTANT than WHAT you're doing or WHY you're doing it.</p>
<p>You could have the cure for cancer. But if you don't market it well, you'll never get your cure out there.</p>
<p>You could have the world's most important message, or greatest story, but no one will see it if you don't promote and package it intelligently.</p></p>
<br/><br/><h3>11. Don't focus on time and effort, focus on results instead</h3>
<img src="https://static2.businessinsider.com/image/58d94af2112f7060008b724b-400-300/11-dont-focus-on-time-and-effort-focus-on-results-instead.jpg" alt="" />
<p><p>Founder of the exclusive entrepreneurial coaching platform, Strategic Coach, Dan Sullivan distinguishes between those who are in the "Time-and-Effort Economy" with those who are in the "Results Economy."</p>
<p>If you're in the time and effort economy, you are focused on being busy. You actually believe the amount of time and energy you put into something merits praise. Conversely, when you are in the results economy, you are only focused on achieving a specific result.</p>
<p>The bottom line is what matters, and thus, it becomes very important to find the most effective way to get there. This is a key difference between entrepreneurs and employees. As Sullivan says:</p>
<p style="padding-left: 30px;">Entrepreneurs have crossed "the risk line" from the "Time-and-Effort Economy" to the "Results Economy." For them, there's no guaranteed income, no one writing them a paycheck every two weeks. They live by their ability to generate opportunity by creating value for their clientele. Sometimes, they &mdash; and you &mdash; will put in a lot of time and effort and get no result. Other times, they don't put in much time and effort and get a big result. The focus for entrepreneurs always has to be on results or there's no revenue coming in. If you work for an entrepreneur, guess what! This is true for you, too. Though you probably have a guaranteed income, it's important to understand that the business you work in exists inside The Results Economy, even if you're sheltered somewhat from seeing that. I say this not to make you feel insecure, but to show you how to succeed in this environment: by maximizing your results while minimizing the time and effort it takes to get them.</p>
<p>Most people don't think in terms of results because their security is in a paycheck. However, when you shift your focus from how little you can do to how much you can do, you change how you work.</p>
<p>You start learning ways to accomplish more faster. You take on greater responsibility. You change your environment. And you also realize just how important sleep and rest are to achieving the highest possible results. Hence, you begin to take more and more time off and rest.</p>
<p>When you dedicate 80 percent of your energy to rest and self-improvement, then you have a lot of fodder and a very sharp saw to use during the time you're actually working.</p>
<p>You're thinking 10X bigger than everyone else. You're operating under short timelines and high pressure. You can tax yourself to extremes while you work because you spend lots and lots of time resting and preparing.</p></p>
<br/><br/><h3>12. Shift your environments regularly</h3>
<img src="https://static2.businessinsider.com/image/58c701fbc140771c008b4eaa-400-300/12-shift-your-environments-regularly.jpg" alt="" />
<p><p>&nbsp;The environments you work in should reflect the work you're doing.</p>
<p>Doing several types of work in the same environment is ineffective. But people do it all the time. They sit in the same seat and mentally shift from one task to another.</p>
<p>A far better approach is to BATCH your activities and to do those activities in a relevant environment.</p>
<p>For example, when I write a blog post, I work in a quiet library where I have no distractions. Because my environment facilitates quality writing, and because I knew I'd be writing that day, I write a lot. It's easier to write 2&ndash;5 blog posts in one sitting than to try writing one post at a time.</p>
<p>Ari Meisel, author and entrepreneur, batches his activities and alternates his environments to match the work he's doing. On days he is recording podcasts, he goes to a studio and records about 5 podcast episodes in a single session.</p>
<p>On other days, he spends his whole day in meetings or on calls. He does this work at his friend's apartment because it's a much more engaging environment.</p>
<p>He also does a lot of writing, and does that at the SOHO HOUSE in New York City, because it's a quiet environment with poor internet connection. The lack of connection stops him from surfing the web and even using his phone, because he has bad reception.</p></p>
<br/><br/><h3>13. Define "wealth" and "success" for yourself</h3>
<img src="https://static4.businessinsider.com/image/596534680976db1b008b4629-400-300/13-define-wealth-and-success-for-yourself.jpg" alt="" />
<p><p>Success and wealth are not all about money.</p>
<p>There are a lot of people who have money and have little "capital" in the other key areas of their lives.</p>
<p>Money, obviously, is very important. It solves a lot of problems. It's speeds processes.</p>
<p>But money is a tool. It's a means to an end. For those engaging in work they truly believe in, money is simply a tool for doing more work.</p></p>
<br/><br/><h3>14. Know and operate from your deepest "why"</h3>
<img src="https://static3.businessinsider.com/image/59b9802e38d20d1f008b5a7a-400-300/14-know-and-operate-from-your-deepest-why.jpg" alt="" />
<p><p>What is your WHY for what you're doing or pursuing?</p>
<p>How could you possibly know your why?</p>
<p>More importantly, how could you know your REAL WHY?</p>
<p>It's actually quite simple.</p>
<p>But it takes some radical honestly.</p>
<p>There's an exercise I'll walk you through to get to your WHY. And more importantly, once you know your deepest WHY for what you're doing, you should operate FROM THAT STATE, not from your lower and base-level reasons.</p>
<p>When trying to understand why you do something, it's better to ask "What" questions then "Why" questions, because "Why" questions tend to put people on the defensive.</p>
<p>Here's a solid question you could ask yourself to understand your WHY.</p>
<p>What about ______________ is important to you?</p>
<p>Let's say you want to start a business, or get a new cellphone, or go to the gym&hellip;</p>
<p>It could be big or small.</p>
<p>But put that thing in there.</p>
<p>What about "going to the gym" is important to you?</p>
<p>Then, you just write the first thing that comes to your mind: because I like feeling good.</p>
<p>Then you take your answer, and put it in the same question: What about ______________ is important to you?</p>
<p>So, given the previous answer: What about "feeling good" is important to you?</p>
<p>So, you want to try to go 7-layers deep. Once you get to layers 5, 6, and 7, you're going to have to be really honest with yourself.</p>
<p>Usually, you can answer layers 1&ndash;4 with your head. However, if you're being really honest with yourself, and I mean REALLY HONEST, you'll need to come from your heart to answer layers 5&ndash;7.</p>
<p>It's at the deepest levels that you'll discover your TRUE WHY for what you're doing. Even if that something is as simple as getting a new cellphone or going to the gym.</p>
<p>But you want to remind yourself of your DEEPEST WHY when you're doing something. And you want to operate from THAT LEVEL, because at your deepest level, you'll be operating from your heart, not your head. Thus, your performance will be much deeper, more authentic, and powerful.</p>
<p>The stakes will be higher.</p>
<p>Suddenly, you're not just going to the gym to "feel good," but because you have a higher calling to perform and need to be as healthy as possible to make it happen (or whatever your deepest WHY is).</p>
<p>Your DEEPEST why will almost always expose something very personal about you, and about your fundamental beliefs about life.</p>
<p>You want to be aware of these things, and how/why they drive you to do what you're doing.</p>
<p>If you truly go through this exercise in a genuine way, you should get some mental and emotional breakthroughs.</p>
<p>You should discover something about yourself, and why you are the way you are, and why you're pursuing the specific things you are.</p>
<p>Know your why.</p>
<p>Then act from the DEEPEST and most powerful WHY you have.</p>
<p>You'll be far more brilliant at what you do.</p></p>
<br/><br/><h3>15. Have a firm stand, it becomes your brand</h3>
<img src="https://static3.businessinsider.com/image/593aeb8ec4adee28008b4ce8-400-300/15-have-a-firm-stand-it-becomes-your-brand.jpg" alt="" />
<p><p>In order to be successful, you must believe in something.</p>
<p>You must have a stand.</p>
<p>All successful people and brands have a clear WHY. As Simon Sinek explains in his book, Start With Why, people don't buy what you sell, they buy why you sell it.</p>
<p>Apple is a great example. In all of their marketing, they don't explain the technicalities of their products, they define and share their core values. They believe technology should be both easy to use and cool.</p>
<p>If you want to be compelling and interesting, you must truly believe in something. You must have a clear stand. That stand becomes your brand. It becomes your trademark. It becomes how you distinguish yourself from others.</p>
<p>When you have a clear stand and brand, you stand out. You are no longer neutral. You believe in something, and are fighting to make a specific change.</p>
<p>As a result, people will either love you or hate you. That's what you want. Lukewarm means you have nothing to say. Lukewarm means you're trying to appeal to everyone.</p>
<p>The riches are in the niches. Your niche is your audience. They are a small group of people who agree with the stand you're trying to make. They are your evangelists.</p>
<p>If you try to appeal to everyone, your message, marketing, and products will be terrible. You won't be clear on your why, and neither will anyone else. Thus, you'll be average like everyone else and your work won't stand out.</p>
<p>Only people with firm stands get really really good at marketing. They care enough about their message to get it out there. They realize that the HOW is just as important as the WHAT and WHY.</p>
<h2>Conclusion</h2>
<p>Are you doing these 15 things?</p>
<p>How aggressively are you doing them?</p>
<p>Do you want to become a multi-millionaire?</p>
<p>Are you ready to think and act bigger?</p>
<p>You've got this.</p></p>
<br/><br/> https://www.businessinsider.com/i-dont-care-how-much-you-love-your-job-you-should-retire-early-2017-9I retired at 34, and I don't care how much you love your job — I think everyone should plan to retire earlyhttps://www.businessinsider.com/i-dont-care-how-much-you-love-your-job-you-should-retire-early-2017-9
Sun, 24 Sep 2017 12:55:00 -0400
<p><span><img style="float:right;" src="https://static1.businessinsider.com/image/59c404fa38d20d3c098b9226-640/crazy kicks 1.jpg" alt="crazy kicks 1" data-mce-source="Mr Crazy Kicks"/></span></p>
<ul>
<li><strong>Mr Crazy Kicks reached financial independence and retired at 34.</strong></li>
<li><strong>He shares why retiring early is the best decision a person can make.</strong></li>
<li><strong>For instance, your circumstances might change — and financial freedom allows you to do the things you want now.</strong></li>
</ul>
<p><span>The longer I’ve been retired, the more I’m convinced that everyone should pursue financial independence.</span></p>
<p><span>I felt trapped while working, and that feeling kept growing as everyday started to look the same. </span></p>
<p><span>Now, I don&#39;t necessarily know what I&#39;ll be doing the next day, week, or month. </span><span>But every day I wake up and find myself full of purpose. </span></p>
<p><span>The fulfillment that comes from living my life the way I want has left me happier than I&#39;ve ever been. I want all of my friends to experience the same thing.</span></p>
<p>Financial independence is a long term goal, and a lot of people feel like they&#39;d be giving up on something now for the sake of later. Some even enjoy their jobs and see themselves working well into their old age. The problem with this line of reasoning is that it&#39;s short sighted.</p>
<h2>Because you can&#39;t know who you&#39;ll become</h2>
<p>At the beginning of my career, being an engineer learning about helicopters and flying simulators was awesome. I even had a chance to fly a test aircraft into work and land on the pad out back. I loved the excitement of learning new things and seeing my work take to the skies. At that time, I thought this was a job I could do for the rest of my life.</p>
<p>Ten years later, I found myself sitting in the back of an aircraft during a test flight. I was the lead engineer, and the auto-pilot software I developed was behind schedule. It was a Sunday, and this was supposed to be our last test before the aircraft were shipped out.</p>
<p><img src="https://static4.businessinsider.com/image/59c4054b38d20d7f378b8c56-742/crazy kick 2.jpg" alt="crazy kick 2" data-mce-source="Mr Crazy Kicks"/></p>
<p>Just as we were finishing up, the test pilot noticed some peculiar behavior. As a quick check, I asked him to nudge the controls to try and excite the problem. Next thing I knew, we were wildly pitching up and down, and the test pilots were having a hoot hollering out “Yeee-haaaww!” as we bucked our way through the sky pulling g&#39;s. Meanwhile, I was furiously scanning data with my heart in my stomach. I was doing the coolest thing my job had to offer, but instead of having fun, I was stressed to the max.</p>
<p>As responsibilities piled up, things that once got me pumped up were starting to punch me in the gut. I started to envy the new engineers and longed for my days as an intern. Here I was, 10 years down the line, in the same place but a completely different person working a completely different job.</p>
<p>We can&#39;t know who we&#39;ll become, or how our jobs will evolve. We don&#39;t even know if our jobs will still be around in ten years. Don&#39;t make a bet now on what your future self will want to do.</p>
<h2>Because you should see the Sistine Chapel</h2>
<p>A benefit of being on the<span> </span><a href="https://www.mrcrazykicks.com/my-journey-to-financial-independence/">path to financial independence</a><span> </span>is that you become less and less dependent on a salary. Although it might have cost me a promotion, I switched to a research and development position. I didn&#39;t need the extra money or stress. Then I negotiated to work from home one day a week, and started wearing jeans and crazy kicks to the office. I started having fun again.</p>
<p>It wasn&#39;t just the research that excited me, but also the enthusiasm of the team I was working with. The engineer running our program was a different caliber. Smart and charismatic, he was someone everyone was happy to work with. We quickly became friends.</p>
<p>With a sharp and cohesive team, we got busy inventing patents and exceeding expectations. We were having a blast while kicking ass. Then disaster struck. We learned our good friend and mentor was battling cancer.</p>
<p>One night, we were celebrating the success of some milestone I don&#39;t even remember with some beers around a fire. We got to talking about travel, and my friend mentioned how he&#39;d always wanted to see the Sistine Chapel with his own eyes. Knowing things weren&#39;t going well with his treatments, I struggled to hold myself back from shouting out “Just go!”</p>
<p>I held back because I knew he couldn&#39;t go. His days off were reserved for treatments. And as a dedicated father and husband, he wasn&#39;t going to leave work and give up the paychecks, or health and life insurance. He sacrificed for his family, but I wish he didn&#39;t have to. I wish he could have just left his job and spent his last days doing those things he wanted.</p>
<p><img src="https://static4.businessinsider.com/image/59c4058d9803c513098b8866-768/roadtobuenavista.jpg" alt="Road_to_Buena_Vista" data-mce-source="Mr Crazy Kicks"/></p>
<p>I don&#39;t want to see any of my friends let money hold them from their dreams.</p>
<h2>Because you might not know what you really want</h2>
<p>Toward the end of my career, I&#39;d maneuvered myself to have good co-workers, exciting projects, and a flexible work from home arrangement. Life was good. Then after years of saving, that magical day happened. Based on our spending, we had<span> </span><a href="https://www.mrcrazykicks.com/how-much-do-i-need-to-retire-early/">enough investments to retire early</a><span> </span>and never work again. Suddenly, the question of whether I wanted to keep working was no longer hypothetical.</p>
<p>I thought I was enjoying work. I though it was silly to give up an easy job with a six figure salary. But when I<span> </span><em>really</em><span> </span>had the option, everything I&#39;d been telling myself went out the window.<span> </span><a href="https://www.mrcrazykicks.com/i-quit-my-job/">I quit my job</a><span> </span>that summer.</p>
<p>We can all hypothesize about what we would do in a situation, but it doesn&#39;t mean shit until the question is a real one. I recommend giving yourself that option one day.</p>
<h2>Because you might not be able to one day</h2>
<p>Around the same time I left my job, my neighbor also retired. He&#39;d worked a printing press for decades, and was much older than me. Things didn&#39;t seem to change much for him, and he kept a similar routine at home. He just wasn&#39;t going to work anymore.</p>
<p>A year later, I noticed he wasn&#39;t cutting his lawn. Shortly after that, we saw an ambulance in front of his house. His health declined quickly.</p>
<p>After working in a career for decades, retirement can be a traumatic event. While you gain your freedom, you might also lose your sense of worth and community. This can lead to depression, and even affect your physical health. I&#39;ve seen many retirees return to work just because they don&#39;t know what to do with themselves. They&#39;ve become institutionalized, and have trouble finding purpose elsewhere.</p>
<p>Everyone should strive for a chance to take some time off while they&#39;re young enough to adapt — while you can still<span> </span><a href="https://www.mrcrazykicks.com/the-ultimate-list-of-awesome-cheap-hobbies/">learn new hobbies</a>,<span> </span><a href="https://www.mrcrazykicks.com/loving-local-life-vermont/">make new friends</a>, or even start a whole new career if you really want to.</p>
<p><img src="https://static2.businessinsider.com/image/59c405fd38d20d3c098b9234-768/playagrandecostarica.jpg" alt="Playa_Grande_Costa_Rica" data-mce-source="Mr Crazy Kicks"/></p>
<p>There is so much to see, learn, and do. Don&#39;t let a paycheck become your life.</p>
<h2>You owe it to yourself to pursue financial independence</h2>
<p>I don&#39;t think anyone should make financial decisions that can pin down their future. Even if you like your job now, one day you might hate it, or it might even disappear. Maybe you&#39;ll find your true calling for a whole new career, or realize there are things in life<span> </span><a href="http://www.mrcrazykicks.com/fighting-the-fear-in-costa-rica/">you want to do and see</a>.</p>
<p>While you might be okay settling for the ordinary now, the future you might have plans for the extraordinary. We have a limited time on this tiny rock hurtling through space, don&#39;t sell your future self short.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/im-a-financial-planner-and-life-is-about-more-than-financial-plans-2017-9" >I'm a financial planner, and I tell my clients money is just the beginning of a strong financial plan</a></strong></p>
<p><a href="https://www.businessinsider.com/i-dont-care-how-much-you-love-your-job-you-should-retire-early-2017-9#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/lifelong-iphone-user-switches-android-samsung-galaxy-s10-2019-5">I've used iPhones for nearly a decade and switched to the Samsung Galaxy S10. Now I understand Android loyalty in a way I never understood before.</a></p> https://www.businessinsider.com/people-ask-me-how-to-save-more-and-i-give-them-all-the-same-advice-2017-8People ask me how to save more, spend less, or start investing — and I give them all the same advicehttps://www.businessinsider.com/people-ask-me-how-to-save-more-and-i-give-them-all-the-same-advice-2017-8
Wed, 30 Aug 2017 10:14:00 -0400J. Money
<p><img style="float:right;" src="https://static3.businessinsider.com/image/59a5e27379bbfd1d008b63be-2400/gettyimages-624453894.jpg" alt="GettyImages 624453894" data-mce-source="John Sciulli/Getty Images for Airbnb"/></p><p>I&#39;ve caught myself offering the same advice lately,<span> </span>anytime someone asks me whether they should pay off their debts or start saving for an emergency fund, or start investing, or start saving for an emergency<span> </span><em>while</em><span> </span>they&#39;re paying off debt<span> </span><em>and</em><span> </span>investing all at the same time.</p>
<p>And that&#39;s simply been: <span>&#34;Just start putting $20/mo towards them!&#34;</span></p>
<p>Nothing too crazy or earth shattering, but definitely a far cry from my old &#34;all or nothing&#34; approach I&#39;ve been accustomed to doing over the years… You know, like when you can&#39;t just have <em>one</em> beer because it&#39;s either PARTY TIME!! or No Time at all? Who likes boring middle grounds, right?</p>
<p>But after recent tests of just doing<span> </span><em>something</em><span> </span>on my long-awaited goals vs doing<span> </span><em>nothing</em>, I&#39;m coming to realize that there&#39;s beauty in hitting multiple areas at the same time as well.</p>
<p>And three of these beauties I&#39;m finding out are as follows:</p>
<h2>#1. Doing something makes your<span> </span><em>heart</em><span> </span>feel good!</h2>
<p>It doesn&#39;t matter if it&#39;s $20 or $2,000 – just the act of applying it to your goal completely changes your mood. Because now you&#39;re finally making moves towards your goals vs just letting them fester in your mind! It&#39;s like finally letting the world know you mean business, despite it not being at the tippy top of your priorities. Because one day it WILL be, and by that time you&#39;ll already have some nice momentum going.</p>
<h2>#2. Doing something makes your<span> </span><em>net worth</em><span> </span>feel good.</h2>
<p>On top of all the warm and fuzzies, applying an extra amount to your goals – no matter how small – of course strengthens your overall net worth as well. Especially if you&#39;re hitting multiple areas now. And even if you choose to divvy up the same amount of money across the goals vs just one big hit towards the #1, I&#39;d posit you&#39;d<span> </span><em>still</em><span> </span>come away higher in the end financially as you push yourself to strive even further. It&#39;s amazing what a few baby steps can do, and this is especially the case for stretching our money!</p>
<h2>#3. Doing something<span> </span><em>motivates</em><span> </span>you.</h2>
<p>This might be the most impactful of all the reasons — simply because once you get on track and start dabbling in multiple areas of your finances, you tend to start hustling and learning harder and harder too! Because now you&#39;ve got multiple races going on and can sense the real momentum starting to take place. It&#39;s like taking an extra shot of caffeine along with your coffee every morning. It was already great as-is, but now it&#39;s downright FANTASTIC! </p>
<p>Again, all this comes from my own tests over the past few months as I expanded my horizon more and decided to stop waiting until<span> &#39;t</span>he perfect time&#39;<span> </span>to start working towards my forgotten goals. Namely in the &#34;giving back to charity&#34; route, and more recently in the &#34;contributing again to my kids&#39; 529 college savings accounts after being m.i.a. for a couple of solid years&#34; route, haha…</p>
<p>Which looks like this:</p>
<ul>
<li>I&#39;ve started giving $20/mo to<span> </span><a href="http://www.budgetsaresexy.com/supporting-vs-spending-money/">my favorite non-profit organizations</a>! (Including<span> </span><a href="http://giving.rockstarfinance.com/">my own</a>!)</li>
<li>I&#39;ve started contributing $50/mo towards each of my two kids&#39; 529s!</li>
</ul>
<p><strong>And I honestly can&#39;t express just how POWERFUL these two actions have made in my overall mood lately.</strong><span> </span>Even if that was the only thing that changed for me I&#39;d recommend it.</p>
<p>Because now instead of cringing every damn time I think of either, a warm wave of happiness washes over me and reminds me that I&#39;m starting to make some progress! Even if it&#39;s not my perfect world of being able to contribute what I<span> </span><em>really</em><span> </span>want to be contributing to them both. I&#39;ve already given out $360 now to my favorite organizations, and a cool $200 to the boys&#39; college accounts! All of which is better than $0.00!!!</p>
<p>So all this to say that while going &#34;all in&#34; on one focused area is quite fine, and I still very much do that in my preferred area every year (<a href="https://www.budgetsaresexy.com/2014/05/power-doing-one-financial-thing/">my one main goal is to max out my retirement accounts no matter what!</a>), there&#39;s something to be said for shoveling <em>something</em> over to other areas as well to get the balls rolling. You don&#39;t necessarily have to wait until it becomes your #1 priority in order to start working on them – you can start RIGHT NOW with only $20.00 a month!</p>
<p><strong>And that&#39;s my challenge to all of you this week who are fed up with feeling bad about yourself for not working towards<span> </span><em>all</em><span> </span>your financial goals.</strong></p>
<p>Pick the one or two sections that are really depressing you right now (or better yet – pick the ones<span> </span><a href="https://www.budgetsaresexy.com/answer-financial-debates/">that *excite you* the most</a><span> </span>so you don&#39;t get burned out!), and then log onto your bank right away and set up automatic transfers of $20/mo each towards them. Start feeling good about it RIGHT NOW vs waiting months or years, or even decades, into the future! There&#39;s never a perfect time, and you know this!</p>
<p>Worst case you just re-direct all future money back to the #1 priority and feel good for having tried something new. It&#39;s the least you can do for your dreams</p>
<p><strong>Just $20/mo, friends… do it!</strong></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/4-smart-things-everyone-under-40-should-do-with-their-money-2017-8" >4 smart things everyone under 40 should do with their money</a></strong></p>
<p><a href="https://www.businessinsider.com/people-ask-me-how-to-save-more-and-i-give-them-all-the-same-advice-2017-8#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/avengers-infinity-war-thanos-killed-half-all-life-earth-endangered-species-2019-4">There are 7.7 billion humans on Earth today. Here's what would actually happen if Thanos destroyed 50% of all life on the planet.</a></p> https://www.businessinsider.com/financial-independence-simple-2017-7I retired at 37 as a self-made millionaire — here's the one-sentence secret to financial independencehttps://www.businessinsider.com/financial-independence-simple-2017-7
Mon, 31 Jul 2017 09:05:00 -0400Chris Reining
<p><img style="float:right;" src="https://static1.businessinsider.com/image/597b9848b50ab126008b58f2-1224/chris-reining-headshot.jpg" alt="Chris Reining headshot" data-mce-source="Courtesy of Chris Reining" data-mce-caption="Chris Reining."/></p><p>I&#39;m playing Jenga because that&#39;s what my nephews always want to play when I&#39;m around. But then we move on to Xbox because kids get bored quickly, so we have to change from one thing to another.</p>
<p>So why when we grow up do we have to play the same game over and over again for the rest of our lives? I mean, as soon as you discover what you&#39;re good at you have to do that for your career.</p>
<p>And then because you can earn more money in that field than any other field you&#39;re forced to do it forever. You never get to say, &#34;I&#39;m bored and I hate my job and I want to play something else.&#34;</p>
<p>You might know how this feels because<span> </span><a href="https://www.huffingtonpost.com/steve-siebold/new-gallup-poll-shows-70-_b_3467078.html" target="_blank" rel="noopener noreferrer">70% of people hate their job</a> and<span> </span><a href="https://amzn.to/2u0876F" target="_blank" rel="noopener noreferrer">The 4-Hour Workweek</a> spent more than four years on The New York Times bestseller list.</p>
<p>Most people tell themselves, &#34;Well, that&#39;s just the way life is.&#34;</p>
<p>I know, because that&#39;s what I used to say until I<span> </span><a href="https://amzn.to/2sHHEXK" target="_blank" rel="noopener noreferrer">discovered financial independence</a>.</p>
<p>And I&#39;m going to tell you everything you need to know about how to become financially independent in just one sentence. Are you ready?</p>
<p><strong>Spend less than you earn and invest the difference.</strong></p>
<p>There. I&#39;ve<span> </span><a href="https://chrisreining.com/archives/" target="_blank" rel="noopener noreferrer">written over 100,000 words</a> about becoming financially independent that can be distilled down into those nine words.</p>
<p>And if you live your life by those nine words you&#39;ll eventually become financially independent — maybe even<span> </span><a href="https://chrisreining.com/retiring-early/" target="_blank" rel="noopener noreferrer">retire early</a><span> </span>if you want to — but more importantly<span> </span><a href="https://chrisreining.com/quit/" target="_blank" rel="noopener noreferrer">you can go play something else</a>.</p>
<p>Now, you might be thinking it&#39;s easy for me to say spend less, because after talking with thousands of my readers they all tell me it&#39;s hard. Why?</p>
<p>Spending less means giving things up, and we hate giving things up.</p>
<p>I was in Brooklyn recently and met this girl who started telling me about her money problems. How she was forced to cut everything to the bone.</p>
<p>So I&#39;m imagining her sneaking into diners to steal leftover food off people&#39;s plates, but then I find out she owns one of those million dollar brownstones and has a housekeeper and a chauffeur and I&#39;m thinking, &#34;How is this to the bone?&#34;</p>
<p>That&#39;s what the<span> </span><a href="https://en.wikipedia.org/wiki/Endowment_effect" target="_blank" rel="noopener noreferrer">endowment effect</a><span> </span>is. Behavioral economists use this term to describe how we place more value on what we have than on what we don&#39;t have.</p>
<p>Like in<span> </span><a href="http://www.journals.uchicago.edu/doi/10.1086/261737" target="_blank" rel="noopener noreferrer">one study</a><span> </span>people were given a coffee mug and when they were offered the chance to sell it or trade it for something of equal value they wanted double what they were willing to pay for the mug.</p>
<p>We hate giving things up.</p>
<p>But if you&#39;re willing to give things up you can get what you want. Take<span> </span><a href="https://disq.us/p/1fk41ai" target="_blank" rel="noopener noreferrer">this comment from a reader</a>:</p>
<p><em>&#34;If you are willing to change your circumstances it is quite possible to quit. I did that this year, left a job I had been at for 13 years and was unfulfilled by, although we have 2 young children, the mortgage, a dog etc, all the regular attachments.</em></p>
<p><em>We downsized our house by half, weeded out many possessions, and moved to a city 15 minutes away with more job options where we could live with one vehicle. Now I am self-employed and taking a course on the side to expand my options, we are 3 years away from mortgage free instead of 15 years, I see my kids much more and everyone is happier, none of us were negatively affected by cutting less important things out of our lives.</em></p>
<p><em>This will not be the route for everyone, but it really is about what you are willing to do or not do, not so much about the attachments you have.&#34;</em></p>
<p>Most people hate reading stuff like this. Why? Because we want to believe everything in life is easy and just happens magically.</p>
<p>When I<span> </span><a href="https://chrisreining.com/how-do-i-actually-stick-to-a-plan/" target="_blank" rel="noopener noreferrer">made the decision</a><span> </span>to become financially independent I&#39;d ask myself every day, &#34;What am I doing today to get there? What steps am I taking?&#34;</p>
<p>It took years of<span> </span><a href="https://chrisreining.com/small-changes/" target="_blank" rel="noopener noreferrer">hard work and discipline</a><span> </span>to spend less than I earned before I realized you can&#39;t cut your spending to nothing and that<span> </span><a href="https://chrisreining.com/get-a-raise/" target="_blank" rel="noopener noreferrer">you need to earn more</a>. And earning more took years of hard work and discipline, too.</p>
<p>Of course, you&#39;re<span> </span><a href="https://chrisreining.com/quit-saving/" target="_blank" rel="noopener noreferrer">investing all this money</a> because no one gets rich from a savings account.</p>
<p>This is what works.</p>
<p>Yet, people still write me saying they&#39;re going to &#34;get rich quick&#34; by trading binary options or investing in cryptocurrency or whatever. Sometimes I&#39;ll follow up with them a year later to see how it&#39;s going (they never respond).</p>
<p>And that&#39;s why I always appreciate the people who are honest about their success, because if I want what they have then I know the steps I need to take to get there.</p>
<p>Anyways, this was going to be about my first year of early retirement and I just realized I didn&#39;t tell you anything about it. So real quick, it&#39;s changed my life.</p>
<p>Sure, sometimes you sleep in until 11 a.m. on a Tuesday knowing your money is working for you. But what I&#39;m learning is it&#39;s really about having control of your time.</p>
<p>Mark Cuban said<span> </span><a href="https://www.iheart.com/podcast/The-Thrive-Global-Podcast-27844768/episode/episode-3-mark-cuban-28202913/" target="_blank" rel="noopener noreferrer">time is your most valuable asset</a>:</p>
<p><em>&#34;You can&#39;t buy it, you can&#39;t find it, you can&#39;t store it, you can&#39;t trade it.&#34;</em></p>
<p>What he&#39;s saying is if you&#39;re not doing what you want to be doing with your time you&#39;re wasting it, because you can&#39;t get any more of it.</p>
<p>When you become financially independent you get your time back because now you control it, and that&#39;s what financial independence is really about.</p><p><a href="https://www.businessinsider.com/financial-independence-simple-2017-7#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/tesla-mini-model-s-for-kids-that-costs-600-family-bought-teach-child-about-driving-electric-2019-4">Tesla has a mini Model S for kids that costs $600, and this family bought it to teach their child about driving electric</a></p> https://www.businessinsider.com/how-to-save-50000-in-your-20s-2017-7Using the 'starve and stack' method to save $50,000 in 2 years could make a difference of up to $1.6 million in retirementhttps://www.businessinsider.com/how-to-save-50000-in-your-20s-2017-7
Tue, 25 Jul 2017 09:51:00 -0400Tanza Loudenback
<p><img style="float:right;" src="https://static1.businessinsider.com/image/59766659552be5ae088b6333-826/stepbrothers1.jpg" alt="Stepbrothers" data-mce-source="Columbia Pictures"/></p><p>Setting goals for yourself is smart, <a href="http://www.businessinsider.com/the-problem-with-goals-2017-3">as long as you have a roadmap</a> for achieving them.</p>
<p>This is especially true for financial goals, like eliminating debt or reaching a six-figure net worth. Devising the right plan is more of a math problem than anything else.</p>
<p>In <a href="https://www.budgetsaresexy.com/starve-and-stack-method-growing-wealth/">a recent blog post</a> on personal finance site Budgets Are Sexy, Nick Vail, a financial adviser with Integrity Wealth Advisors and a writer at <a href="http://www.removetheguesswork.com/">Remove the Guesswork</a>, explained one of his favorite strategies for getting ahead financially: The &#34;starve and stack&#34; method.</p>
<p>Though it may sound extreme, it&#39;s really just a hack for building wealth without sacrificing long-term comfort or happiness.</p>
<p>Here&#39;s how it works: Suppose you&#39;re in your early 20s and newly married, or cohabiting with your partner. Instead of subsisting on dual incomes, limit your total spending to an amount that can be covered with just one income. Then, between the two of you, save an amount equal to 100% — or as close to that mark as you can get — of the other income. &#34;Starve,&#34; in this case, refers to living well below your means (if you would literally starve using this method, don&#39;t do it).</p>
<p>The Bureau of Labor Statistics estimates the average 20 to 24-year-old <a href="https://www.nerdwallet.com/blog/loans/student-loans/average-salary-by-age/" target="_blank" rel="noopener noreferrer">earns about $32,500 a year before taxes</a>. For a couple socking away one income, it would take less than two years to reach $50,000 in savings.</p>
<p>Compare that to each person saving 15% of their take-home pay, the savings rate typically recommended by experts. In that case, it would take <em>six years or more </em>to reach $50,000; five years if they contributed directly to a retirement plan, <a href="https://www.businessinsider.com/contribute-both-401k-and-ira-2017-7">like a 401(k) or IRA</a>, on a pre-tax basis.</p>
<p>The idea is to temporarily pinch pennies in order to reach your savings goal — something that&#39;s easier to accomplish when you&#39;re less established in your career and don&#39;t have a family to care for or a house to maintain.</p>
<p>The real reason to &#34;starve and stack,&#34; however, is to use your savings to invest, ideally in a retirement account. It shouldn&#39;t be used to book a luxury vacation or make a down payment on a home, says Vail. To enjoy the full benefits of compound interest, <a href="https://www.businessinsider.com/why-invest-stock-market-your-20s-2017-7">it&#39;s crucial to invest early and often</a>.</p>
<p>If you&#39;re single, the &#34;starve and stack&#34; method may take more sacrifice, but it can still be done. Reducing housing costs, <a href="https://www.businessinsider.com/cutting-back-key-retiring-much-earlier-2017-7">one of the biggest expenses Americans face</a>, by living with multiple roommates, or even back home with your parents, can make a big difference.</p>
<p>In the graph below, Vail illustrates how a couple — or an individual — who saves $50,000 by age 25 would fare by retirement, compared to someone who puts off their savings until later in life. He assumes an average annual return of 7%, and continued savings of $5,000 a year until 65. The difference is more than $1.6 million by retirement.</p>
<p><img src="https://static2.businessinsider.com/image/5967c779c50c29120a8b47e7-880/power-compound-interest-graph.jpg" alt="power compound interest graph" data-mce-source="Budgets are Sexy"/>&#34;Far too often I hear from people that they will invest &#39;when they can&#39; but right now is not the time,&#34; Vail <a href="https://www.budgetsaresexy.com/starve-and-stack-method-growing-wealth/">wrote in his post</a>. &#34;The best thing that young people can do is invest as much as they can early on in their career. I know it isn&#39;t easy. You have student loans, you&#39;re looking for the right job, and you may be saving for your first home. However, building a nest egg when you are young is the best financial move a young family can make.&#34;</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/why-invest-stock-market-your-20s-2017-7" >Where you put your savings in your 20s could make a difference of as much as $3 million by retirement</a></strong></p>
<p><strong>DON'T MISS:&nbsp;<a href="http://www.businessinsider.com/how-much-money-should-i-save-2017-6" >How much the average American could be saving at every age</a></strong></p>
<p><a href="https://www.businessinsider.com/how-to-save-50000-in-your-20s-2017-7#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/avengers-infinity-war-thanos-killed-half-all-life-earth-endangered-species-2019-4">There are 7.7 billion humans on Earth today. Here's what would actually happen if Thanos destroyed 50% of all life on the planet.</a></p>